• Home
  • Apps
  • Apps News
  • Zomato to Lay Off Over 500 Employees, Announces Up to 50 Percent Pay Cut For Rest

Zomato to Lay Off Over 500 Employees, Announces Up to 50 Percent Pay Cut For Rest

Employees affected by the latest layoffs will continue to receive 50 percent salary for the next six months, Zomato CEO Deepinder Goyal said.

Share on Facebook Tweet Snapchat Share Reddit Comment
Zomato to Lay Off Over 500 Employees, Announces Up to 50 Percent Pay Cut For Rest

Zomato has a total headcount of around 4,000 people with operations live in over 24 countries

Highlights
  • Zomato CEO Deepinder Goyal sent an email to its employees
  • The email detailed the latest changes
  • Zomato is changing its business strategy going forward

Zomato on Friday announced layoffs of around 520 people, or 13 percent of its total global workforce of nearly 4,000 employees to reduce the economic impact it faced due to the COVID-19 outbreak. The Gurugram-based food aggregator, which has operations in over 24 countries worldwide, also instituted a temporary pay cut of up to 50 percent for its remaining employees that will come into force from June. The new developments by Zomato comes just days after arch-rival Swiggy decided to lay off approximately 900 employees from its cloud kitchen business to overcome the impact of the coronavirus pandemic.

People affected by the layoffs will continue to receive a 50 percent salary for the next six months, or until they get a new job, whichever comes first, along with their current health insurance.

Founder and CEO Deepinder Goyal in an email to Zomato employees explained the latest changes. “Our business has been severely affected by the COVID lockdowns,” he said in the email, a copy of which has been posted in a blog post from Zomato. “A large number of restaurants have already shut down permanently, and we know that this is just the tip of the iceberg.”

‘Complete shift'
Goyal predicted that due to the pandemic, the number of restaurants would shrink by 25-40 percent over the next six to 12 months. This has already pushed Zomato to redefine its business strategy and make a “complete shift” towards becoming a transactions-first company, he noted.

Although Goyal claimed in the email that Zomato is “financially stable” and is set to continue its hiring primarily in product and engineering divisions, it is looking for ways to reduce its costs. The company has decided to make partial or full work from home a permanent feature for its employees to cut real estate expenses. Similarly, it is reducing salaries for all its entire organisation.

“Lower cuts are being proposed for people with lower salaries, and higher cuts (up to 50 percent) for people with higher salaries,” Goyal wrote, adding that the temporary salary cut will be eligible for 2X employee stock grants.

Groceries as a temporary saviour
Due to the coronavirus spread that has brought social distancing as a universal practice, Zomato — along with its competitor Swiggy — started enabling grocery deliveries in India. Goyal's email highlighted that the company is already delivering groceries in 185 cities across the country and is planning to bring a similar model in the United Arab Emirates (UAE) and Lebanon. Notably, the company started its grocery with over 80 cities last year.

“We see long term potential in this [grocery] segment,” Goyal said in the email. “Grocery also fits perfectly into our vision of better food for more people.”

Nevertheless, Zomato and other new entrants are facing tough competition from existing contenders including BigBasket and Grofers. The ease in the national lockdown would also impact the grocery delivery operations as people are likely to start resuming offline shopping in the coming days.

Zomato and Swiggy are also demanding the government to allow alcohol deliveries through their platforms in India. This would help generate some sales at the time when people are restraining from ordering prepared food online. The government, however, is yet to give a go-ahead to both companies. But in the meantime, the National Restaurant Association of India (NRAI) is in plans to make things even tougher for the food aggregators by launching its own food delivery platform that will go live anytime soon.

Second layoff in one year
The fresh layoff is the second in one year as Zomato in September last year laid off 541 people to favour automation and artificial intelligence (AI) in its operations. It also comes following the dismissal considered by Swiggy last month. A Zomato spokesperson at that time told Gadgets 360 that the company didn't have plans to lay off any of its employees.


How are we staying sane during this Coronavirus lockdown? We discussed this on Orbital, our weekly technology podcast, which you can subscribe to via Apple Podcasts or RSS, download the episode, or just hit the play button below.

Affiliate links may be automatically generated - see our ethics statement for details.
Comments

For the latest tech news and reviews, follow Gadgets 360 on Twitter, Facebook, and Google News. For the latest videos on gadgets and tech, subscribe to our YouTube channel.

Jagmeet Singh Jagmeet Singh writes about consumer technology for Gadgets 360, out of New Delhi. Jagmeet is a senior reporter for Gadgets 360, and has frequently written about apps, computer security, Internet services, and telecom developments. Jagmeet is available on Twitter at @JagmeetS13 or Email at jagmeets@ndtv.com. Please send in your leads and tips. More
Samsung Galaxy A21s Launched With Quad-Cameras, 5,000 mAh Battery: Price, Specifications

Related Stories

 
 

Advertisement

Advertisement

© Copyright Red Pixels Ventures Limited 2020. All rights reserved.
Listen to the latest songs, only on JioSaavn.com