“We need to make sure that we preserve as much cash as possible to weather the storm” said Deepinder Goyal, Founder and CEO of Zomato, on Friday. The food delivery app has decided to cut its employee numbers by 13%, one of the largest among unicorn Indian startups. Moreover, the workforce that does remain will experience a temporary reduction of upto 50% in their pays starting June.
The people who do get laid off will receive half of their salaries along with health insurance till the next 6 months or until their next gig, whichever comes first. Zomato is also seeking opportunities to extend its services via logistics, to businesses outside the food delivery world.
Last month, rival Swiggy had already announced about giving up on a part of their kitchen team while also deciding to stop functions at some of its centres.
Goyal addressed all Zomato employees in an email, explaining how a large number of restaurants have already shut down permanently and this was just the tip of the iceberg. He also expects “a shrink of 25-40% in the number of restaurants over the next 6-12 months.”
The decision comes days after Zomato was reported to be in the process of launching its own Genie service, similar to its competitor Swiggy in the form of customer-facing pick up and drop service.
The coronavirus outbreak has had an immense impact on the country’s economy. The food delivery business has had to face the brunt of it all following nation’s uncertainly long lockdown.