Swiggy To Fire 250+ Employees With Further Layoffs In Store

Food delivery giant Swiggy is reported to be laying off around 250 employees across supply chain, operations, customer service and technology roles. The number represents 3-5% of the food delivery major’s total workforce.

The layoffs at Swiggy come weeks after its biggest rival Zomato fired 3% of its workforce in a performance-related layoff. ET reported that this might also be a similar move: a performance-related layoff.

The publication also cited a company insider saying that Swiggy’s HR head Girish Menon has informed employees about the performance-based layoffs in a recently concluded company town hall. Swiggy has started restructuring internal teams before laying off people in the next few months.

“There have been no layoffs at Swiggy. We concluded our performance cycle in October and have announced ratings and promotions at all levels. As with every cycle, we expect exits based on performance,” a Swiggy spokesperson told Inc42.

To cut down its cash burn, Swiggy is moving employees from its grocery delivery service Instamart, according to the aforementioned report. The foodtech is said to be going conservative on the expansion of its quick commerce arm.

In a bid to reduce costs, Swiggy is also said to be in the process of a rationalisation, which would see the number of employees fired dramatically. These layoffs will impact employees in tech, engineering, product roles and operations.

Swiggy’s layoffs came at a time when the company is losing ground to its rival Zomato, even as it continues to improve upon gross merchandise value (GMV) and gives heavy discounts.

According to a recent report by the brokerage firm Jefferies, Swiggy grew 40% while Zomato’s growth was 55% during the first half of FY23. 

It is prudent to mention that in a report by investment firm Prosus, Swiggy was said to have amassed $1.3 Bn in GMV during H1 FY23. However, according to Jefferies, Zomato’s GMV stood at $1.6 Bn, and its market share stood at 55%, the highest ever.

Jefferies noted that Swiggy’s losses during H1 FY23 were six times higher than Zomato’s standalone losses, a toll of the former’s heavy discounting. Swiggy’s losses in the first half of FY23 were at around $315 Mn (INR 2,570 Cr), while Zomato’s standalone loss during the period remained around the $50 Mn (INR 410 Cr) mark.

India’s startup ecosystem has seen a high volume of layoffs towards the end of 2022; since the beginning of November, 13 startups have fired almost 2,800 employees, according to Inc42’s ‘Indian Startup Layoff Tracker’. Therefore, about 25% of all startups that have laid off in 2022 have done so in the last five to six weeks.

In all, 53 Indian startups have laid off 17,989 employees so far in 2022. With almost three weeks still to go in 2022, it is more than likely that this number might just rise.