Two of the sources said the layoffs could go beyond 250 in coming months while another said people across supply chain, operations, customer service and technology roles will be affected. Swiggy in an emailed response told ET that there have been no layoffs yet, but did not rule out any firing this month or the near future.
“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,” Swiggy said in response to a query sent by ET.
Several richly valued tech firms have been downsizing their teams after two years of excessive hiring amid a funding squeeze and investors raising concerns over profitability.
According to a company insider, Swiggy’s head of human resources Girish Menon informed employees about the performance-based exits in a recently concluded town hall. The company has started restructuring its teams, the person said.
Swiggy is moving employees from its grocery delivery service Instamart to other functions, people cited above said. This is intended to reduce the company’s cash burn on Instamart as it goes conservative on the expansion of its quick-commerce business.
According to brokerage firm Jefferies, Swiggy’s losses during the January-June period were “much higher at over $315 million”, compared to approximately $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.
Some industry executives indicated that there could be more layoffs in the coming months as Swiggy is planning to rely on a leaner team to function its various businesses going forward.
“Major rationalisation exercise is being planned,” a person privy to the matter said on the condition of anonymity. “They want a very lean team structure across functions. Sensitisation workshops for employees are planned for later this month. They have appointed a consulting firm to advise them on the restructuring… Most of the layoffs are likely to happen in tech, engineering, product roles and operations.”
In the same town hall where the HR head announced performance-based exits, Swiggy had also announced promotion of a number of executives to vice president level along with the announcement of Mihir Shah, who heads operations, being made senior vice president of operations, people cited above said.
Swiggy has joined a growing list of tech companies resorting to layoffs amid a tough funding environment. Competitor Zomato had on November 19 confirmed that it would be laying off 3% of its workforce. As ET reported last month, Amazon has laid off hundreds in India and is planning to shut down multiple businesses, including its food delivery business Amazon Foods. Globally as well Amazon and tech giants like Meta and Twitter have laid off employees.
“There seems to be a definitive move at rationalising the workforce in most organisations,” said Praful Nangia, managing partner of leadership advisory firm Talent North. “A lot of people (across organisations) that are currently being let go were hired when the talent market was extremely inflated and there was intense competition to attract talent. In some cases, certain teams or functions became too heavy, probably in anticipation of accelerated growth, and there is some housekeeping happening. What we see today is an interesting paradox as companies are downsizing but still hiring for certain roles,” he added.
ET had reported on December 1 that Swiggy has shut down its cloud kitchen brand Bowl Company in Delhi-NCR region, but a source told ET that the company is ramping up its private label cloud kitchen brand in Coimbatore and Chennai.
The layoffs come on the back of a report by Jefferies that said Zomato is leading Swiggy in both food delivery business and its quick commerce business through Blinkit.
On November 24, Swiggy’s investor Prosus said the company’s core food-delivery business clocked order growth and gross merchandise value (GMV) growth of 38% and 40%, respectively, for the first six months of calendar 2022. Swiggy’s quick-commerce business Instamart saw order and GMV growth of 20 times and 15 times, respectively.