Food and grocery delivery company Swiggy will sack 380 employees, company CEO Sriharsha Majety told employees through an internal note. ET has reviewed the note sent to all employees of Swiggy on Friday morning.
“We’re implementing a very difficult decision to reduce the size of our team as a part of the restructuring exercise. In this process, we will be bidding goodbye to 380 talented Swiggsters,” the CEO said.
ET reported December 9 that Swiggy was planning to fire at least 250 employees and that the number could be higher.
Majety said that the growth of the company’s food delivery business has slowed down and has not been in line with the company’s projections. He said that the company overhired and it has been “a case of poor judgement” on his part.
“Our overhiring is a case of poor judgement, and I should have done better here,” he told employees.
The company has also decided to shut down its meat delivery business, among the many verticals that Swiggy had started along with food and grocery delivery.
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Swiggy’s Instamart competes with BigBasket’s BB Now, Blinkit, Zepto and Dunzo in grocery as well as meat delivery.“While we continue to be fully committed to exploring new business opportunities, we have also taken a harder look at some of our existing new verticals. Effective very soon, we will be shutting down our Meat marketplace,” Majety said.
He said that meat will continue to be delivered through its Instamart service, but decided to shut down the vertical as it failed to achieve product market fit, even as the team behind its meat vertical was doing “exceptionally well with solid inputs.”
Majety said Swiggy will continue to be invested in all the other new business verticals. The company recently started several units, including premium grocery delivery service Handpicked, direct-to-commerce ecommerce marketplace Minis, and restaurant table reservation service DineOut.
He said that the impacted employees will get compensation of three to six months’ salary, depending on the employee’s tenure, with a guaranteed payout of at least three months’ wages.
With this, Swiggy is the latest to join the ongoing wave of fresh layoffs in Indian startups. ET has been reporting on job cuts at startups such as ShareChat, Dunzo, Rebel Foods, Hubilo, Ola and Cashfree among others. These job cuts come after Indian startups laid off at least 18,000 jobs last year.
Prosus-backed Swiggy has been trying to reduce cash burn in key businesses such as food delivery and Instamart amid a clear slowdown in late-stage funding in startups.
Prosus said in a filing in November last year that its share of Swiggy’s trading loss increased to $105 million from $34 million, driven by investments to increase growth in both the core food delivery business and in Instamart. This translated to a burn of over $300 million for the six months ended September 2022.
Meanwhile, it is facing increased competition from Zomato-owned Blinkit.
According to brokerage firm Jefferies, Swiggy’s losses during the January-June period were “much higher at over $315 million,” compared with around $50 million in losses for rival Zomato on a standalone basis and nearly $170 million inclusive of losses at the latter’s quick commerce unit Blinkit.
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