Food delivery platform Zomato will lay off 520 employees, or 13% of its workforce, and temporarily cut salaries of the rest, on account of the impact of the lockdown due to COVID-19.
Zomato’s founder & CEO Deepinder Goyal stated in an internal email that employees who are being let go will receive half their salaries along with health insurance for the next six months or till they find another job, whichever is earlier. Their Employee Stock Ownership Plans (ESOPS), previously allocated, will however continue to vest during the period. Meanwhile, the contract staff will be given two months’ severance pay.
Executives across marketing, events, and content, among others, are likely to be hit the most by these layoffs, as per an ET report.
“A large number of restaurants have already shut down permanently, and we know that this is just the tip of the iceberg. I expect the number of restaurants to shrink by 25-40% over the next 6-12 months. What actually happens, for better or worse, is anybody’s guess," Goyal said.
The COVID-19 pandemic and resultant nationwide lockdown have hit the food delivery platform’s business severely which employs nearly 4,000 people. Apart from layoffs and pay cuts, Zomato has decided to make work-from-home – fully or partially -- a permanent policy. It also launched grocery delivery in order to generate more business.
The downsizing and pay cuts are aimed at preserving cash amid the uncertainty, through Goyal revealed that the company had enough cash reserves and had brought down monthly cash burn significantly. With this development, Zomato joins the likes of rival Swiggy and many other internet startup firms such as OYO, Cure.fit, Udaan, BlackBuck, Treebo, among others that have let workers go in the recent month on account of the pandemic.