Swiggy embarks on a downsizing exercise following the Covid-19 lockdown crisis that has hit its earnings. This is despite the food delivery major efforts chalking out an accelerated path to profitability last December.
In a communication to its employees, Sriharsha Majety, co-founder and CEO, Swiggy, wrote, “There are long-term tailwinds for the delivery business and digital commerce when things settle eventually, nobody knows how long the uncertainty will last. While all our hard work and some good luck has meant that we have had a stable setup all these years, we have to make some very hard decisions today.”
He said, “We are choosing to scale down or shut down adjacent businesses that are highly volatile or will not be highly relevant for the next 18 months. The biggest impact is on the cloud kitchens business. Since the onset of Covid-19, we have already begun the process of scaling down our kitchen facilities temporarily or permanently, depending on their outlook and profitability profile. We are already operating at significantly lower levels on our staffing and physical infra than our earlier footprint, and will continue to optimise before we get more clarity on order volumes for food delivery.”
In line with the business decisions, it will axe 1,100 of its employees spanning across grades and functions in the cities and head office over the next few days. The HR team along with the line manager will have a 1-1 conversation with impacted employees to provide details and clarifications. All other employees will receive appropriate communication from the line managers regarding the continuity with the company.
All impacted employees will receive at least three months of salary irrespective of their notice period or tenure. It will offer an extra month of ex-gratia in addition to their notice period pay, working out to between 3-8 months of salary depending on the tenure. While its standard ESOP policy has a 1-year cliff and annual vesting, it will be extending ESOP vesting to the nearest quarter including the months of notice period and waive off the 1-year cliff for those who have not completed one year.
During the current health crisis, the company will provide medical insurance cover for its employees and their nominated family members till December 31, 2020. Additionally, insurance cover for their parents will be provided. The Accident and Term insurance is till December 31, 2020. A Wellness Assistance Programme with unlimited tele/video consultation access to experienced doctors, counsellors and financial advisors if provided till December 31, 2020.
“We will also offer free outplacement support from RiseSmart for mid-senior management employees, giving full access to their career coaching services, content and personalised job search. Given that connectivity is going to be paramount during this time from a career transition standpoint, impacted employees will be enabled to retain their allocated work laptops and be supported on mobile phone communication allowance for the next three months,” stated Majety.