Zomato to lay off 13% workforce
/Online food-delivery platform Zomato on Friday said it will reduce its workforce by 13%, while also implementing a temporary pay cut of up to 50% for remaining employees as nationwide lockdown to prevent spread of COVID-19 severely affected its business.
In an email to employees, Zomato Founder & CEO Deepinder Goyal said that the workers affected by the layoffs will continue to get half of their salaries, in addition to health insurance and outplacement support, for the next six months or till they find another job, whichever is earlier
The company is also looking at making “partial or full work from home” a permanent feature to reduce real estate costs.
“Our business has been severely affected by the COVID lockdowns. A large number of restaurants have already shut down permanently, and we know that this is just the tip of the iceberg,” Mr Goyal said, adding that he expects the number of restaurants to shrink by 25-40% over the next 6-12 months.
Many people have volunteered for a 100% pay cut for at least 6 months, the company remains short of its salary reduction target.
Lower cuts are being proposed for people with lower salaries, and higher cuts (up to 50%) for people with higher salaries.This temporary reduction in pay will also be eligible for 2x ESOP grants.
All employees who no longer have any work at Zomato, will continue to be “with us at 50% 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% of their time and energy towards looking for jobs outside of Zomato.”
Some impacted employees who are not directly on Zomato’s payroll, will get two months of severance
“Each person leaving us will also be allowed to keep their Zomato issued laptops and phones (if any),” he said, adding, “Previously allocated ESOPs will continue to vest during this period of six months, as all these people will remain on our payroll with reduced pay.”
The company will continue to hire people in some areas, primarily in product and engineering.
Noting that the company’s highest recurring expense today outside of payroll is real estate, Mr Goyal said Zomato has over 150 offices globally, most of which are spaces for their sales and logistics teams. “Given how well we have been working from home, we have decided to make partial or full work from home a permanent feature of our lives.”
