Zomato to lay off 13% employees, up to 50% salary cuts for rest
Zomato to let go of 13 per cent of the staff and cut by up to 50 per cent the salaries of the remaining employees for six months.
Parul May 16, 2020
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In wake of this move, about 500 people will be laid off in the second round of retrenchments by the company in a year.
Deepinder Goyal said, 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. I expect the number of restaurants to shrink by 25-40 per cent over the next 6-12 months,” he added.
Goyal quoted in an email to employees, “While we continue to build a more focused 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 per cent of our workforce going forward,” he added.
The CEO also highlighted in the email to its employees that the entire organisation from June will take a pay cut for six months, the time period in which he expects the economy to get some semblance of normalcy. Lower cuts are being proposed for people with lower salaries, and higher cuts (up to 50 per cent) for people with higher salaries,” Goyal added.
Over the last couple of months, the business had changed dramatically and some of the changes would be permanent, he said.
The founder’s email further read, “all our employees who no longer have any work at Zomato will continue to be with us at 50 per cent salary for the next six months. However, during this time, outside of the handover period of one-two weeks, we expect these folks to spend 100 percent of their time and energy towards looking for jobs outside of Zomato.”
The layoffs come even though the company says it is well-capitalised. However, the lack of capital or extending the runway is the main reason why dozens of internet startups have been sacking staff.
However, the company would continue to hire people for product and engineering space, he added.