Swiggy – A Prominent Food-Tech Company Takes a Hit in The Time of Crisis
Founded in 2014 in Bengaluru, Swiggy has become a household name in India’s food-tech industry. The company provides a hassle-free delivery experience with its advanced logistics system and a variety of food options from over 160,000 restaurants across the country. Swiggy’s success is reflected in its 1.6 billion-dollar funding, which includes Series I investment. However, the pandemic has not been kind to the company, forcing it to take drastic measures to stay afloat.
On May 18th, reports confirmed that Swiggy laid off around 1,100 employees, which accounted for approximately 14% of its overall workforce. The company’s decision to cut jobs primarily followed the plunge in demand for its services. India’s nationwide lockdown resulted in the closure of all restaurants and cafes, leaving Swiggy with limited business. This move came after rivals Zomato, and Uber Eats also implemented austerity measures and cuts.
In a statement to the press, Swiggy said the layoffs were part of their plans to ‘reduce the size of the team optimally,’ which would help it become a more lean and efficient organization. Despite acknowledging the impact on the workforce, Swiggy emphasized that it was committed to helping everyone affected by the layoffs. In response, the company provided a minimum of three months’ salary, an additional month of ex-gratia, and all extension of insurance coverage for the affected employees.
During the last year, Swiggy raised $1.6 billion, with investors such as Tencent, Meituan Dianping, and Naspers as its primary backers. The Delhi NCR region saw the highest number of layoffs as the company closed down its cloud kitchen operations in the city. Swiggy is not alone in the troubled food-tech sector as it caters to a highly discretionary market that is susceptible to external factors such as the pandemic.
In conclusion, Swiggy’s journey has been marked with significant highs and lows, including hardships such as the ongoing pandemic. The company’s decision to cut jobs, although harsh, was intended to secure its future and ensure that the business continues to operate in an efficient and profitable manner. With the government’s plans to reduce lockdown restrictions, Swiggy will hope to recover lost business and return to its pre-lockdown level. Nevertheless, it remains to be seen how it will fare in the hyper-competitive food delivery market.