BENGALURU: Online food delivery major Zomato is slashing its team size by 13%, or 520 people, and implementing a temporary pay cut of up to 50% for the rest of its staff due to the virus outbreak hitting its core business hard.
People being laid off will receive 50% of their salary for up to six months, or until they find a job, whichever is earlier. This also includes health insurance. For employees who face a pay cut, expected to last for at least six months, the company will allocate double the amount of stock grants.
Zomato co-founder and CEO Deepinder Goyal told his staff that he expects the number of restaurants to shrink by 25-40% over 6-12 months. “Therefore, we need to make sure that we preserve as much cash as possible to weather the storm if the business environment gets worse, or continues to be the same for the rest of the year or more,” he added.
Earlier, Zomato had fired about 540 of its customer support staff in September, citing automation of large chunks of support functions. After the latest round of layoffs, Zomato would employ just under 3,500 people.
To reduce real estate costs, which is its highest recurring cost outside payroll, Goyal said Zomato has decided to make work-from-home — partial or full-time — a permanent feature for staff, depending on the nature of their work.
In April, TOI reported Zomato’s rival Swiggy was cutting about 1,000 jobs in its private kitchens business as food delivery order volumes continue to remain significantly below what it was before the Covid-19 outbreak. Both the platforms have started expanding in grocery delivery since the lockdown. Zomato’s grocery delivery is available in 185 cities and Goyal said the company sees “long-term” potential in it.