Food delivery major Swiggy is letting go of about 350-400 employees or around 7% of its workforce as tech startups make attempts to check costs and move towards profitability, two sources aware of the development said. The tech teams and a section of the customer care department (specifically call centre) will be the most impacted by the move, they said.
This is the second round of layoffs at the Bengaluru-based firm which is preparing to get listed on the bourses. In January last year, Swiggy had cut 380 jobs, joining a batch of startups which had resorted to layoffs amid a funding winter and investor pressure to be fiscally prudent. “Swiggy wants to simplify work processes and build operational efficiencies. The layoffs are in that direction,” said a person aware of the company’s thinking.
The rush of investor capital which chased Indian startups following the Covid-led spurt in digital adoption eased amid tough global macroeconomic conditions with investors getting selective in terms of funding. As the ecosystem went through a readjustment, startups across the board set out to build more efficiently, shutting loss-making verticals, deploying technology to streamline systems and getting more prudent with their budgets. As several unicorn startups attempt to go public, they are more focused on achieving profitability, a metric that public markets tend to reward.
Last year, in a blog post Swiggy co-founder and CEO Sriharsha Majety had said that its core food delivery business had turned profitable as of March 2023 excluding employee stock option costs. Swiggy is also investing heavily in Instamart, its quick commerce business which can be quite cash-guzzling. Rival Zomato posted its first quarterly profit in Q1FY24 and has sustained it through the second quarter.
Recently, big internet firms like Paytm and Flipkart have also trimmed their workforce. In response to employee queries in a townhall on Thursday, Flipkart said that the firm will let go of some 1,000 employees as part of its annual performance review process.