Swiggy lays off 380 employees as the Prosus Venture- and SoftBank-backed Indian food delivery giant tries to weather a market downturn that has forced the company to become leaner and more disciplined and plans to close the meat market.
In an email to employees on Friday, Swiggy co-founder and CEO Sriharsha Majety said the startup is pushing ahead with plans for profitability and will have to make tough decisions to save cash. said. The Bengaluru-based startup, which reached his $10.7 billion valuation in a funding round last January, employs about 6,000 people.
Majety said the startup, like other companies in the same category around the world, has exceeded growth projections for food delivery. “This meant that we needed to rethink our overall overhead costs in order to meet our profitability targets. We were starting out, but we also had to right size our overall labor costs.In line with our projections for the future.Our overhiring is a case of lack of judgment and I’m here But I should have done better,” he wrote to his employees.
“Last year we identified a number of areas for improving the pace of execution. As different organizations were iteratively built, it created a few additional layers in the pocket. definitely increased, hurting agility, which meant that in these cases we were doing less with more, instead of doing more with less. Did.”
Majeti said the company also plans to close the meat market “soon.”
“While we remain committed to exploring new business opportunities, we are also looking more seriously at some of our existing new areas. We’re doing very well with solid inputs, but despite iterations, we couldn’t achieve product market fit here.From a customer perspective, we will continue to offer meat delivery through Instamart.Everything else. We will continue to invest in new areas.”
Affected employees will be paid three to six months of severance pay and an extra day, depending on how long they’ve been with the startup, Majety said in an email. Swiggy has also accelerated vesting her cliff and is providing them and their dependents with medical insurance through May of this year.
Job cuts that began in earnest last year are gaining momentum heading into 2023. Many startups such as Zomato, Ola, Byju’s, Unacademy, Cashfree, CoinDCX, Dunzo, ShareChat have laid off staff in recent months. According to industry estimates, more than 20,000 of his Indian startup workforce have lost their jobs since the market downturn.
Swiggy last year hired a group of bankers to evaluate plans for a $1 billion initial public offering in 2023, TechCrunch previously reported. We are currently waiting for market conditions to change before moving forward with our plans.
The startup ecosystem fundraising winter could last another 12 to 18 months, and the industry could have to deal with “a lot of turmoil and volatility,” says e-commerce giant Flipkart’s chief executive. Managing Director Kalyan Krishnamurthy warned late last year.
“My prediction is that many startup founders will enter the market between April and June next year, and that will be the defining moment for the ecosystem,” he said.
