According to sources, food and grocery delivery app Swiggy will lay off around 8-10 per cent of its 6,000-strong workforce to rationalise costs amidst a funding slowdown, said two people aware of the development. The layoffs also come at a time when the company is aiming to turn operationally profitable before its upcoming IPO.
The sources said that the layoffs will hugely affect employees in product, engineering and operations. In October, the food tech unicorn recently concluded its performance review and several employees were also put under a performance improvement plan (PIP), said the first source mentioned above.
The source further said that the management had prolonged filing Swiggy’s initial papers for a public listing with the Sebi due to the poor performance of tech stocks in India and abroad.
The first source said, “The management has decided to take a wait-and-watch mode, and has now pushed the draft filing for its IPO to December 2023.”
Another source said, “The work pressure has increased sharply over the past six months or so and the company has been shuffling teams for a while now…Employees are now just being asked to chase numbers and hit positive unit economics before the (public) listing.”
They also said that Swiggy has a numbered rating system for all employees on a scale of 0-5. “Employees with a rating of 2 and below have received intimation about PIP and they will be the most impacted,” the source not wanting to be named added.
In the middle of a funding crisis, with venture capitals gripping purse strings, and rapdly increasing fears of recession and uncertain global economic environment. Indian startups have not had a good run in this financial year. Startup companies over all sectors have been downsizing head counts in large numbers to prune costs. Approximately 17,000 people are forecasted to have lost their jobs in 2022 across educational technology, retail, finance, sports, rentals, among others.
Layoffs at Swiggy come few months after its competitor Zomato also slacked off around 3% of its 3,800 workforce in November 2022. A few weeks before the layoffs, Zomato allegedly saw three top-level exits, including co-founder Mohit Gupta, initiatives head Rahul Ganjoo and former head of Intercity Legends service Siddharth Jhawar.
Swiggy has also come out as a stiff competition to Zomato as a private company, especially after its $120-million acquisition of restaurant discovery and reservation platform Dineout in May 2022.
Until this takeover, both Swiggy and Zomato rivalled only on two turfs — food and grocery delivery. With Dineout, it directly stepped into Zomato’s restaurant discovery market, which also has a few other competitors such as Nearbuy and Eazydiner.