In order to rationalize costs amidst a funding slowdown, the food and grocery delivery platform, Swiggy is planning to slash around 8-10% of its 6,000-strong workforce, as per the latest report.
Performance Improvement Plan For Employees
Two people aware of the development said that these layoffs also come at a time when the company is aiming to turn operationally profitable before its upcoming IPO.
These layoffs will mainly affect the employees in product, engineering and operations, the sources said.
In October, the foodtech unicorn concluded its performance review.
Then several employees were also put under a performance improvement plan (PIP).
Delay In IPO
Besides this, the management had delayed filing Swiggy’s preliminary papers for a public listing with the Sebi owing to the poor performance of tech stocks in India and abroad.
According to the sources, “The management has decided to take a wait-and-watch mode, and has now pushed the draft filing for its IPO to December 2023,”.
Further adding, “The work pressure has increased sharply over the past six months or so and the company has been shuffling teams for a while now…Employees are now just being asked to chase numbers and hit positive unit economics before the (public) listing,”.
Who Will Get Impacted By These Layoffs?
Presently, Swiggy has a numbered rating system for all employees on a scale of 0-5.
Sources said, “Employees with a rating of 2 and below have received intimation about PIP and they will be the most impacted,”.
It seems that Swiggy rival Zomato also fired around 3% of its 3,800 workforce in November 2022.
Zomato reportedly saw three top-level exits, including co-founder Mohit Gupta, initiatives head Rahul Ganjoo and former head of Intercity Legends service Siddharth Jhawar just a few weeks before the layoffs.
In the meantime, Swiggy has also emerged as a tough competition to Zomato as a private company.
Especially after its $120-million acquisition of restaurant discovery and reservation platform Dineout in May 2022.
Prior to this acquisition, both Swiggy and Zomato competed only on two turfs — food and grocery delivery.
After Dineout came into picture, it directly stepped into Zomato’s restaurant discovery market, which also has a few other competitors such as Nearbuy and Eazydiner.
Besides this, Swiggy’s Instamart service had exclusively secured large funding worth $700 million led by investment firm Invesco in January 2022 in the grocery delivery vertical.
Joining the league, Zomato also acquired grocery delivery app Blinkit for $570 million.
However, the rumors of the deal had been drifting around since early 2022.
