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Swiggy sacks 1100 employees citing crisis due to covid-19

New Delhi: On Monday, the food delivery app Swiggy laid off 1100 of its employees through a mail, according to the blogs of its website as its business has been hit severely by the coronavirus pandemic.

“Today is one of the saddest days for Swiggy as we have to go through an unfortunate downsizing exercise,” Swiggy co-founder and CEO Sriharsha Majety wrote in an email on May 18th. The shutting down of its kitchen facilities temporarily or permanently has been begun since the onset of the pandemic, the email further read.

“We unfortunately have to part ways with 1,100 of our employees spanning across grades and functions in the cities and head office over the next few days,” Majety wrote in the email.

After Uber terminated a lot of its employees last week over video call, Swiggy is heading towards the same sort of treatment.

A sort of relief will be given to the displaced employees as they’ll be given 3 months’ salary over and above the notice period. Along with this, the email stated that for each year of employment within the company, a month’s worth of salary will be provided to these employees. For example, if a person has worked for 3 years with Swiggy, he will be given 6 months’ salary.

The Swiggy CEO has also said that the company will be continuing the insurance of the workforce it has fired till December, 2020. The insurance is also being provided to their parents.

The decision has come as food delivery companies are suffering losses and the business expected isn’t going anywhere close to the direction where it is supposed to, in light of coronavirus.

“While Covid (COVID-19) might have long-term tailwinds for the delivery business and digital commerce when things settle eventually, nobody knows how long the uncertainty will last,” said Majety.

Swiggy has said that it will reduce its scale of business or close the other operating adjacent businesses that are likely to change for the worse and won’t be relevant enough for the next 18 months. It also said that the company’s cloud kitchen business is hit the most.

“Swiggy will have to cut expenses to be able to achieve profitability with a smaller order volume than planned earlier,” Mr Majety said. The company needs to reduce costs in order to “withstand any further risks” from the COVID-19 uncertainty, he added.

Its competitor, Zomato had earlier announced firing 13% of its employees in the coming days.

Covid-19 is shelling companies, established since years, within weeks.