'We do not have enough work for all': Zomato to lay off 13% employees due to COVID-19 impact

Indian restaurant aggregator and online food delivery platform Zomato on Friday said it is going to layoff around 13% of its workforce as it does not have enough work for all of its employees on account of the impact of COVID-19 pandemic.

Deepinder Goyal, Zomato Founder and CEO, said in a blog post that multiple aspects of our business have changed dramatically over the last couple of months and many of these changes are expected to be permanent.

"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% of our workforce going forward," he said.

Goyal said he, along with COO and co-founder Gaurav Gupta and CEO Food Delivery Mohit Gupta, would get in touch with impacted employees to walk them through the next steps and help find them jobs as soon as possible.

"We are going to assure them that we stand by them, and will financially and emotionally support them to the fullest possible extent," Goyal said.

The company will provide financial support, outplacement support, healthcare and equity to these employees.

As part of the financial support, he said, "All our 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 work with us through manpower agencies and not directly on our payroll. We are going to help these agencies support these employees with two months of severance against 15 days of contractual obligation," he said.

Those having Zomato issued laptops and phones will also be allowed to keep them, he said.

Goyal added that 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.

Goyal also proposed a temporary reduction in pay for the entire organisation.

"Starting June, I am 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," he said.

Goyal further said, "Starting June, I am 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 per cent) for people with higher salaries".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.

Some of the employees have already taken a voluntary pay cut, with some of them even volunteering to take a 100% pay cut for at least 6 months, he said.