Swiggy To Announce 2nd Round Of Layoffs Amid Cost-Cutting Measures

New Delhi: Bangalore-based food delivery giant, Swiggy, is reportedly letting go of approximately 350-400 employees, constituting around 7 percent of its workforce. This move comes as part of the company's strategy to control costs and move towards profitability, a trend observed among various tech startups.

Impact On Tech Teams And Customer Care

The layoffs are expected to predominantly affect the tech teams and a section of the customer care department, specifically the call center operations. This marks the second round of layoffs for Swiggy, a notable player in the food delivery space, as it readies itself for a listing on the stock exchanges. (Also Read: Stock Market Closed Today? Check When It Reopens)

Strategic Move Towards Operational Efficiency

Insiders reveal that Swiggy aims to simplify work processes and enhance operational efficiencies through these layoffs. The company is aligning itself with the broader industry trend where startups are focusing on building more efficiently, streamlining operations, and exercising fiscal prudence. (Also Read: Three-Day Bank Holiday Alert! Financial Institutions To Shut Down On THESE Dates)

Funding Challenges And Investor Selectivity

The backdrop of these workforce reductions lies in the changing landscape of investor capital for Indian startups. The influx of capital, which initially followed the surge in digital adoption during the COVID era, has experienced a shift.

Investors are becoming more selective due to tough global macroeconomic conditions. Consequently, startups are revisiting their strategies, shutting down loss-making verticals, and optimizing budgets.

Pursuit Of Profitability Ahead Of Listing

As Swiggy gears up for a potential public listing, achieving profitability has become a crucial metric. This aligns with the broader trend observed among unicorn startups aiming to go public, as public markets tend to reward profitability.

Swiggy's co-founder and CEO, Sriharsha Majety, had previously stated in a blog post that the core food delivery business turned profitable as of March 2023, excluding employee stock option costs.

Industry Shift And Comparable Cases

Swiggy's move follows a similar trend in the industry, where other major players like Zomato, Paytm, and Flipkart have also implemented workforce reductions.

Rival Zomato recently posted its first quarterly profit, focusing on fiscal prudence. Flipkart, in a town hall meeting, announced plans to let go of around 1,000 employees as part of its annual performance review process.