Zomato, a popular food ordering platform is eliminating 13 percent of its workforce on account of the coronavirus crisis. The online restaurant guide has about 4,000 employees in different roles. The company said a 50 percent salary cut will also come into effect for the next six months. In a blog post, Zomato Founder and CEO Deepinder Goyal said multiple aspects of the company's 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 around 13 percent of our workforce going forward," Goyal said. He said those impacted will get invites for a zoom call with the leadership team within the next 24 hours. Goyal said he along with COO and co-founder Gaurav Gupta and CEO Food Delivery Mohit Gupta would be getting on video calls over the next couple of days with impacted employees to walk them through the next steps and help find them jobs as soon as possible.
Speaking on the financial support to these employees, he said: "All our employees who no longer have any work at Zomato, will continue to be with us at 50 percent salary for the next 6 months. During this time, outside of the handover period of 1-2 weeks, we expect these folks to spend 100 percent of their time and energy towards looking for jobs outside of Zomato".
Goyal also said the company will provide them outplacement support and also health insurance for 6 months or as soon as they find another job.
Previously allocated employee stock ownership plans (ESOPs) will continue to vest during this period of 6 months, he added.
"Starting June, I am proposing a temporary reduction in pay for the entire organization. Lower cuts are being proposed for people with lower salaries, and higher cuts (up to 50 percent) for people with higher salaries".
Zomato expects these cuts to be discontinued as soon as the economy starts getting back on track. "I foresee and hope this to be around 6 months from now," he added.
This is the second time Zomato has laid off staff in the last year. Earlier in September 2019, the company had sacked 540 employees from its customer support team or 10 percent of its workforce at the time.
Last month, Swiggy said it will be laying off a part of its private brand kitchen team while discontinuing operations at a few of its centers amid the coronavirus pandemic.
(With PTI inputs)
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