Zomato Announces Lay-Offs, Says Number Of Restaurants Will Shrink By 25-40%

New Delhi: Food delivery giant Zomato is preparing to fire about 13 per cent of its staff in the next 6 months, according to a note by CEO Deepinder Goyal.

Goyal has stated that the number of restaurants in the country is expected to shrink by 25-40 per cent in a year’s time. The company will introduce operational revisions like reducing real estate costs and six-month temporary pay cuts for employees.

He, however, assured that the company has good cash reserves and is financially stable.

“Multiple aspects of our business have changed dramatically over the last couple of months and many of these changes are expected to be permanent. While we continue to build a more focussed Zomato, we do not foresee having enough work for all our employees. We owe all our colleagues a challenging work environment, but we won’t be able to offer that to ~13% of our workforce going forward,” Goyal wrote.

Laid-off employees will get 50 per cent of their salary for the next six months along with health insurance or till they get a new job. Outsourced and contractual employees will get two months of severance pay through third party agencies. Zomato will also provide support to help find jobs for laid-off employees. People being let go will be notified by the end of day on Friday, Goyal informed.

Blaming Covid-19 for the huge slump in world economy, Goyal said “the worst might be around the corner”, explaining why the company needs to preserve as much cash as possible to “weather the storm if the business environment gets worse”.

Rivals Swiggy have reportedly announced they will lay off 1,000 people of its workforce.