Food tech platform Swiggy is about to undertake massive job cuts in its cloud kitchens to match decline in number of online order due to COVID-19 as per report. The layoffs will take place from its cloud kitchens across nearly ten Tier 1 and 2 cities and the company may shut many of its cloud kitchens, relocate them and re-negotiate rental contracts for spaces.
Startup news portal Entrackr reported that the layoff number could be between 800-900 employees mostly contractual ones.
Swiggy runs 1,000 kitchens across nearly 15 cities under its Swiggy Access programme, but majority of them are run by restaurant partners. The affected employees will be only from the company’s private label kitchens, a person in the know said. They will be asked to leave by May, the person added.
Swiggy confirmed that some of its cloud kitchen employees will be impacted and that the company was also looking to discontinue operations at a few kitchens.
“As COVID-19 disrupts daily life across the country, the hospitality industry has come under severe pressure. As the lockdown gets further extended, we are evaluating various means to stay nimble and focused on growth and profitability across our kitchens. These include renegotiating contracts with landlords, relocation of certain kitchens to more optimal locations and discontinuing operations at a few kitchens that have been severely impacted since the lockdown came into effect,” Swiggy said in a statement.
“This will unfortunately have an impact on a certain number of kitchen staff who will be fully supported during this transition,” the company added.
It’s have been tough times for food delivery business with number of orders declining close to 70% from Pre-Covid times. Therefore restructuring was on the charts to reduce losses that the company is facing. Additionally, the company has expanded its grocery delivery to more than 125 cities to offset some loss incurred in its food delivery business.