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 had reported on December 9 the company was planning to fire at least 250 employees but the number could be higher.
The company has also decided to shut down its meat delivery business, among the many verticals that Swiggy has started along with food and grocery delivery.
Swiggy’s Instamart competes with BigBasket’s BB Now, Blinkit, Zepto, Dunzo in grocery delivery as well as meat delivery business.
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“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 that Swiggy will continue to be invested in all other new business verticals. The company has recently started several businesses, 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 a cash payout between three to six months depending on the employee’s tenure with a guaranteed payout of at least three months.
With this, Swiggy is the latest to join the ongoing wave of fresh layoffs in Indian startups. ET has been reporting about new job cuts at startups like 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.
Burn and competition
Prosus-backed Swiggy has been trying to cut down on its burn in key businesses like 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 would translate 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 to 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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