Swiggy To Lay Off Hundreds Of Employees. CEO Says Two Things Happened In 2022

“We’re implementing a very difficult decision to reduce the size of our team as a part of a restructuring exercise. In this process, we will be bidding goodbye to 380 talented Swiggsters. This has been an extremely difficult decision taken after exploring all available options," according to an internal e-mail shared by Sriharsha Majety, Swiggy’s chief executive and co-founder.

The food delivery platform is looking to shut down some verticals as a cost-reduction measure and soon, it be shutting down its Meat marketplace, the email said. 

“While our cash reserves allow us to be fundamentally well positioned to weather harsh circumstances, we cannot make this a crutch and must continue identifying efficiencies to secure our long-term. Our overhiring is a case of poor judgement, and I should’ve done better here."

The CEO said in 2022, two things happened. “Over the last year, under challenging macroeconomic conditions, companies around the world (public and private) are adjusting to the new normal, with refreshed investment horizons and accelerated timelines for profitability. We’re no exception here, and have already advanced our own timelines for profitability on food delivery and Instamart. In addition, the growth rate for food delivery has slowed down versus our projections ( along with many peer companies globally ). This meant that we needed to revisit our overall indirect costs to hit our profitability goals.. While we’d already initiated actions on other indirect costs like infrastructure, office/facilities, etc, we needed to right-size our overall personnel costs also inline with the projections for the future," he said.  

Apart from startups, big tech global tech firms including Facebook-owner Meta, Amazon, Twitter and Salesforce have also announced thousands of layoffs. The redundancies follow a major hiring spree during the height of the coronavirus pandemic when companies scrambled to meet demand as people went online for work, shopping and entertainment.

Swiggy will offer the laid-off employees a minimum payout of three months or a notice period which can be extended by 15 days or more, based on their tenure in the company.

Food and grocery delivery platform Swiggy had reported a widening of its net loss to ₹3,628.9 crore for FY22. The company had posted a net loss of ₹1,616.9 crore in the previous fiscal.

According to the financial data accessed by the business intelligence platform Tofler, the company's revenue from operations stood at ₹5,704.9 crore for the fiscal ended March 2022 against ₹2,546.9 crore in the year-ago period.

As per the Director's report filed by the company with the Registrar of Companies, its total revenue grew more than two-fold to ₹6,119.8 crore during the fiscal under review from ₹2,675.9 crore a year ago.

"We continued to focus on growth post-business recovery from COVID, particularly on the expansion of our quick commerce offering, we saw our revenues improve 2.3× in FY22," the filing by the company to the RoC stated.