Food delivery companyhas laid off 380 members of its 6,000-strong workforce, as part of a restructuring exercise, said CEO and Co-founder, Sriharsha Majety, in an email to his employees.
“We are 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,” Sriharsha said in the mail.
Attributing the move to the macroeconomic conditions, Sriharsha wrote, “We’re no exception here, and have already advanced our own timelines for profitability on food delivery and Instamart.”
“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,” he said.
The founder also told his employees that “overhiring” was a “poor judgement” on his part.
“We have initiated actions on other indirect costs like infrastructure, office/facilities, etc., we needed to right-size our overall personnel costs also inline with the projections for the future. Our overhiring is a case of poor judgement, and I should’ve done better here,” he wrote.
Doing less with more
In his mail, the founder highlighted that the company has identified many areas to improve its pace of execution.
“Due to the iterative build-up of the different orgs, there have been some extra layers created in pockets.” This, Sriharsha said, had increased communication overheads and compromised the company’s agility, resulting in doing less with more in certain cases.
“Operating in multiple hyper-competitive categories means that we have very little room to slow down and we wanted to arrive at a more deliberate org design to be more nimble, effective, and efficient at the same time. We’re already implementing the learning from this org-effectiveness work to not let this miss happen again,” the founder wrote.
Shutting down meat marketplace
In the mail, Sriharsha also said that Swiggy would be shutting down the Meat marketplace, as it had not hit product market fit, despite “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.”
Severance pay and benefits
The Swiggy CEO said the employees who are being be laid off would be informed via one-to-one conversations, starting today.
The laid-off employees will get a cash payout of three to six months based on their tenure and grade. A minimum of three months payout will be given as severance pay. This includes variable pay or incentives at 100%; joining bonus and retention bonus payout will be waived off.
Relocation expense will also be given to those who had relocated in the last one year, if they choose to relocate to their previous location or permanent address. Annual vesting cliff will also be waived off.
“We will be extending vesting to the nearest quarter from the last working date. They will also be eligible to participate in the ESOP liquidity program slated for July 2023,” Sriharsha said in the mail.
Career transition support would be provided for the next three months, and medical insurance cover for laid-off employees and nominated family members would be available till May 31, 2023.
“Our business and overall execution has been on a very encouraging trajectory, and we’ve made huge strides in improving the consumer experience (including a very well done NYE) and profitability. We need to build on this progress, adjust to the new normal, and move forward towards becoming the best version of ourselves,” Sriharsha ended the mail.
Edited by Swetha Kannan