Swiggy mulls laying off 500 cloud kitchen workers, report says

India’s Swiggy is looking to lay off roughly 500 of its cloud kitchen staff, as the food delivery major makes adjustments to conserve cash and increase its runway.

Photo credit: Swiggy

The job cuts, which will affect mostly contractual employees, is set to take place from cloud kitchens across 10 tier-one and two cities, Livemint reported, citing people familiar with the situation.

In November last year, Swiggy started focusing on cloud kitchens, launching 1,000 virtual kitchens for its restaurant partners in India. However, the lockdown prompted by Covid-19 hit this business hard, as it depends mostly on ground workers such as kitchen staff and delivery persons.

In response, Swiggy may close the majority of its cloud kitchens, relocate them, and renegotiate rental contracts, the report said.

“There were some cuts on jobs with respect to efficiency (of roles); this was, however, sanctioned by the board pre-Covid time itself,” a Swiggy executive who declined to be named told Livemint. “Around four to five months ago, we were beginning to end contracts with cloud kitchen brands that were not efficiently able to service demand.”

The exec also said that Swiggy is currently not considering any pay cuts, but has warned its employees that there will be no pay hikes this year.

Tech in Asia has reached out to Swiggy for a statement on the matter.

Yesterday, Entrackr reported that the Bengaluru-based startup is expected to slash about 800 to 900 employees from its workforce next month. The move comes after Swiggy received board approval for its cost-cutting plan, several people with knowledge of the matter said.

“The employees that are expected to be asked to leave are going to be across teams in their cloud kitchen division,” one of them said.

Just weeks ago, Swiggy announced it has secured US$43 million as part of its series I financing round, its second major raise this year after banking US$113 million in February. The startup previously said it will use the series I funds to expand into new lines of business, including cloud kitchens and new categories for its on-demand services.