Swiggy highlighted tough macroeconomic conditions as well as a halt in the growth of its food delivery service...
Digital Desk: Swiggy, an Indian meal delivery company, announced on Friday that it will lay off 380 people out of its 6,000-person workforce, citing adverse macroeconomic conditions and a halt in the growth of its food delivery operation.
"As part of a reorganisation process, we are implementing a painful choice to reduce the size of our workforce. We will be saying farewell to 380 talented Swiggsters during this process. "This has been an extremely painful decision reached after evaluating all available possibilities," according to an internal e-mail published by Swiggy's chief executive and co-founder, Sriharsha Majety.
According to the email, the food delivery network is planning to close down several sectors as a cost-cutting strategy, and it will shortly close down its Meat marketplace.
Two things happened in 2022, according to the CEO. "Over the previous year, under adverse macroeconomic conditions, companies around the world (public and private) are adjusting to the new normal, with updated investment perspectives and hastened timetables for profitability. We are no exception and have already advanced our own profitability timelines for food delivery and Instamart. Furthermore, the rate of increase for food delivery has slowed in comparison to our forecasts ( along with many peer companies globally ). This meant that we have to reconsider our overall indirect costs to meet our profit targets. While we had already begun measures on various indirect costs such as infrastructure, office/facilities, and so on, we wanted to right-size our overall human costs in line with future estimates," he explained.
Aside from startups, large global technology giants such as Facebook owner Meta, Amazon, Twitter, and Salesforce have announced hundreds of layoffs. The layoffs come after a massive hiring frenzy during the height of the coronavirus outbreak when businesses hurried to fulfil demand as people turned online for work, shopping, and pleasure.
Swiggy will offer laid-off employees a three-month minimum compensation or a notice period that can be extended by 15 days or more based on their experience with the company.
Swiggy, a food and grocery delivery business, posted a net loss of 3,628.9 crores for FY22. In the previous fiscal year, the company recorded a net loss of 1,616.9 crores.
Following financial records accessed by the business intelligence platform Tofler, the company's revenue from operations for the fiscal year ended March 2022 was 5,704.9 crore, up from 2,546.9 crores the previous year.
According to the company's Director's report submitted to the Registrar of Companies, overall income more than doubled to 6,119.8 crores during the year under review from 2,675.9 crores the previous year.
"We continued to focus on growth post-business recovery from COVID, particularly on the expansion of our rapid commerce service, and we saw our sales climb 2.3 in FY22," the company noted in its RoC filing.
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