Zomato, the online food-delivery startup and food aggregator has decided to lay off 13 per cent of its workforce, that is close to 520 employees. The remaining staff members will have to bear a 50 per cent pay cut, owing to the business being adversely affected by the COVID-19 outbreak and ensuing lockdown.
Those being asked to leave will be given 50 per cent of their salaries as well as health insurance cover for the next six months or till they get a new job, whichever happens earlier. The Company will also support the laid off employees in their job search.
Last year, in September, Zomato had downsized by letting go about 540 employees from its customer support division, which accounted for 10 per cent of its workforce.
In a letter to the staff, Deepinder Goyal, founder and CEO, Zomato, has made it clear that the business has suffered severely due to the lockdown, with a significant number of restaurants having already shut down permanently, and more to follow suit in the future. With so much uncertainty in the air, the Company will be imposing temporary pay cuts for all the employees starting June. The cuts will be in proportion to the salaries, with the higher-salary earners set to face higher cuts of up to 50 per cent. The temporary pay cuts will be applicable for 2X employee stock grants.
Right now, the Company is focussing on preserving cash in preparation for the worst.