India’s Zomato to cut 13% of staff

Zomato is set to lay off roughly 13% off its workforce as the food delivery startup looks to cut down costs amid the Covid-19 pandemic.

Photo credit: sharafmaksumov

In a blog post, Zomato founder and CEO Deepinder Goyal said the India-based startup will be providing affected employees with half of their salaries and continued health insurance support for six months or until they find a new job.

Though Zomato did not disclose how many workers it’s letting go, the number falls close to 500, according to a TechCrunch report.

Goyal said that Zomato has been “severely affected” by the global lockdown measures that came with the ongoing crisis.

“A large number of restaurants have already shut down permanently, and we know that this is just the tip of the iceberg,” he wrote, adding that he expects the number of restaurants to shrink by 25% to 40% over the next six to 12 months. India has been on lockdown since March 24.

With this, the chief exec said that Zomato aims to make a “complete shift towards being a transactions-first company,” focusing on a small number of large market opportunities.

In addition to the layoffs, Goyal also proposed a temporary pay cut for the entire company. “Lower cuts are being proposed for people with lower salaries, and higher cuts (up to 50%) for people with higher salaries,” he said.

Less than two months ago, Goyal said on Twitter that hundreds of Zomato employees have already taken deep voluntary pay cuts at the time to help the company conserve cash.

Zomato archrival Swiggy has also made similar moves in an effort to weather the crisis. Last month, it was reported that the Bengaluru-based startup was letting go around 1,000 staff, mostly from its cloud kitchen business.