Swiggy to lay off hundreds of employees. CEO says ‘two things happened in 2022’

Indian food delivery company Swiggy said on Friday it will lay off 380 of its 6,000-strong workforce due to challenging macroeconomic conditions and slow growth in its food delivery business.

We are implementing a very difficult decision to reduce the size of our team as part of a restructuring exercise. In the process, we will say goodbye to 380 talented Swegsters. According to an internal email shared by Sriharsha Majety, CEO and co-founder of Swiggy, it was a very difficult decision that was taken after considering all available options.

The email said the food delivery platform is looking to close some verticals as a cost-cutting measure and will soon close its meat market.

“While our cash reserves allow us to be well-positioned in difficult weather conditions, we cannot turn this into a crutch and must continue to identify efficiencies to ensure our long-term viability. “Our over-recruitment is a case of poor judgment and I should have done better here.”

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The CEO said two things happened in 2022. Over the past year, under challenging macroeconomic conditions, companies around the world (public and private) have been adjusting to the new normal, with refreshed investment horizons and accelerated timelines for profitability. We are no exception here and have already developed our timeline for profitability in food delivery and Instamart. Additionally, food delivery growth rates have slowed compared to our forecasts (along with many global peers). This means we need to overhaul our overhead costs to meet our profitability goals. While we have already started taking measures on other indirect costs such as infrastructure, office/facilities, etc., we also need to directly measure our overall personnel costs. With future predictions.”

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Apart from startups, major global tech companies including Meta, Amazon, Twitter and Salesforce, which owns Facebook, have also announced thousands of layoffs. The layoffs follow a major hiring spree at the height of the coronavirus pandemic, when companies struggled to meet demand as people went online for work, shopping and entertainment.

Swiggy offers laid-off employees a minimum payment of three months or a notice period which can be extended by 15 days or more based on their tenure with the company.

Food and grocery delivery platform Swiggy had reported a widening net loss 3628.9 crore for FY 22. The company had posted a net loss 1616.9 crore in the previous financial year.

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According to financial data accessed by Tofler’s business intelligence platform, the company’s revenue from operations is approx 5,704.9 crore for the fiscal ending March 2022 vs 2,546.9 crore in the previous year period.

According to the manager’s report filed by the company with the Registrar of Companies, its total revenue has more than doubled. 6119.8 crores during the financial period under review from 2,675.9 crore a year ago.

“We continued to focus on business growth post-COVID, particularly in expanding our fast-paced business offerings, seeing our revenues improve by 2.3x in FY22,” the company’s filing to the RoC said.

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