Zomato to lay off 13% of the workforce

Zomato to lay off 13% of the workforce and temporary pay cut of up to 50% for remaining employees

Indian 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 the spread of COVID-19 severely affected its business.

Starting from June, the company is proposing a temporary reduction in pay for the entire organisation. Lower cuts are being proposed for people with lower salaries, and higher cuts (up to 50%) for people with higher salaries

Currently, Zomato has around 4,000 employees in different roles. The company is also looking at making “partial or full work from home” a permanent feature to reduce real estate costs.

The job cuts and temporary pay cuts for employees were announced in a blog post by Zomato Founder and CEO Deepinder Goyal, and he 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.

“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,” Deepinder Goyal said.

Everyone who is impacted will get invites for a zoom call with the leadership team within the next 24 hours, he said.

Deepinder 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.

Talking 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”.

Deepinder 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.

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.