Indian Food Delivery Startups Swiggy, Zomato Shed Staff
A little over a month after announcing new funding, Indian food delivery startup Swiggy is laying off 1,100 employees.
Swiggy’s Sriharsha Majety wrote in a message to employees on the company’s blog Monday, that the core food delivery business had been “severely impacted” by the COVID-19 pandemic. Majety added that Swiggy would be scaling down or shutting down adjacent businesses that would likely be highly volatile or not relevant in the next 18 months, most notably its cloud kitchen operation.
“While Covid might have long-term tailwinds for the delivery business and digital commerce when things settle eventually, nobody knows how long the uncertainty will last,” Majety wrote. “We therefore need to be prepared to see through this winter, to emerge stronger on the other side. While all our hard work and some good luck has meant that we have had a stable setup all these years, we have to make some very hard decisions today.”
The news of layoffs comes a little more than a month after Swiggy raised $43 million in a new round of funding, bringing its valuation to $3.6 billion, according to TechCrunch. The company also raised $113 million in February.
But the company, like other food delivery companies in India, has been hit hard by COVID-19. Both Ziggy and competitor Zomato saw food delivery orders drop 70 percent in late March and early April, according to the Economic Times.