Online food delivery platform Swiggy might lay off around 1,000 employees as demand crashes amid the coronavirus spread. The company is planning to lay off a part of its private brand kitchen team as well as discontinue operations at a few of its centres. The delivery platform is also looking to re-negotiate terms with its landlords.
According to a report in The Economic Times, Swiggy is planning to lay off the employees next month. The company confirmed the same but did not disclose the number of workers who would be impacted by this move. "As the lockdown gets further extended, we are evaluating various means to stay nimble and focused on growth and profitability across our kitchens. This will, unfortunately, have an impact on a certain number of kitchen staff who will be fully supported during this transition," said a Swiggy spokesperson. The Bowl Company and Homely are two of its kitchen brands.
As per the daily, the food delivery platform is looking to reduce its monthly cash burn from $40 million in May last year to less than $5 million in the next few quarters. The firm is looking to conserve cash for the next 20-24 months, the report stated.
Along with layoffs, Swiggy is also looking to reduce discounts on meals.
These measures are being taken as orders have reportedly dropped 60 per cent for both Swiggy and its rival Zomato. While both are operational, they are working with skeletal delivery and restaurant partners.
Food delivery has been included in the list of essential services by the government. Nevertheless, with most restaurants shut, Swiggy and Zomato's businesses have also taken a beating. Around 95 per cent of restaurants have gone offline with insufficient supply and staff.
While Swiggy's rival Zomato has not announced any layoffs for now, if the lockdown continues for a while, the companies would be forced to layoff more employees.