Food delivery platform Zomato said on Friday that it has restored the salaries of the employees who were asked to take pay cuts. It said that COVID-19 'positively impacted the health' of their business and that they hope to make complete recovery in the next 3-6 months.
In a blog post, founder Deepinder Goyal said that when asked to take salary cuts, 75 per cent of their employees volunteered. "In order to quickly reduce our costs during the initial days of the COVID-19 crisis, we had requested our staff to volunteer for salary cuts. 75 per cent of our employees volunteered for partial salary cuts resulting in a total reduction of 14 per cent in our payroll costs. As of today, all the original salaries have been re-instated, and our net losses of under $1m for July reflect the increased payroll cost already," he said.
Goyal said that the company has been positively impacted by the pandemic. "COVID-19 has positively impacted the health of our business - we seem to have gained 2-3 years along this vector. In July 2020, we estimate our monthly burn rate to land under $1m, while our revenue should land at 60 per cent of pre-COVID peaks ($23m per month). We expect to make a complete recovery in the coming 3-6 months while continuing to maintain tight control on costs/profitability," he added.
The Zomato founder said that the revenue of the company grew 105 per cent in FY20 as compared to FY19, while costs only grew 47 per cent in the corresponding period. "While COVID-19 has impacted the size of our business, it has accelerated our journey to profitability. In terms of the size of the business, COVID-19 has set us back by a year or so -- but a year is only a small blip when you are building a company for the next 100 years," he said.
Goyal said that the company's gross merchandise volume (GMV) grew 108 per cent in FY20 over FY19. He added that soon after the coronavirus pandemic, the company's GMV crashed 80 per cent in the last week of March. "As of now, our food delivery GMV has recovered to 60 per cent of pre-COVID levels," he stated.
Deepinder Goyal also said that they have rebranded Zomato Gold as Zomato Pro. "Deals on Zomato Pro are now only available if a user pays their restaurant bill through the Zomato app," he said.
Also read: Zomato struggles to get $100 million funding from Ant Financial amid India-China tension
Also read: Mother Dairy partners with Zomato to home deliver fruits, vegetables in Delhi NCR