Food aggregator Swiggy announced the downsizing of the company by laying off 380 employees on Friday.
In a letter to employees, cofounder Sriharsha Majety said, "We're implementing a very difficult decision to reduce the size of our team as a part of a restructuring exercise. In this process, we will be bidding goodbye to 380 talented Swiggsters."
He cited challenging macroeconomic conditions, as one of the reasons that compelled the company to cut jobs and said "While our cash reserves allow us to be fundamentally well positioned to weather harsh circumstances, we cannot make this a crutch and must continue identifying efficiencies to secure our long-term."
Additionally, he said the growth rate for food delivery has slowed down versus the company's projections. He said, "Our overhiring is a case of poor judgment, and I should’ve done better here."
The food aggregator is also shutting down its newest meat vertical. Majety said, "Effective very soon, we will be shutting down our Meat marketplace. While the team has done exceptionally well with solid inputs, we haven’t hit product market fit here despite our iterations. From a customer perspective, we will still continue to offer meat delivery through Instamart. We will continue to stay invested in all other new verticals."
Swiggy will be providing three-month of severance pay to the laid-off employees along with career transition support and six-month health cover. The company is also letting employees keep the work-allocated laptops to help in job search.
This comes a month after SWiggy told Business Today that layoffs are not on the cards but performance-based exits can be expected. “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,” the statement by Swiggy stated.
Reportedly, Swiggy has also delayed its IPO and listing ambitions amid the global economic slowdown.
Bundl Technologies, the parent company of Swiggy, saw its losses widen by two times from Rs 1,616 crore in FY21 to Rs 3,628 crore in FY22, according to the company’s financials which were released recently. The increase in losses comes against the backdrop of its expenses also expanding exponentially from Rs 4,292 crore to Rs 9,748 crore in the last year.