Layoffs in the food delivery sector continue. Today, India-based service Swiggy said it will cut 1,100 jobs as coronavirus continues to negatively impact the on-demand food delivery sector (h/t TechCrunch). In an email to staff that was also posted to the company’s blog, Swiggy cofounder and CEO Sriharsha Majety confirmed that the the company is cutting jobs “across grades and functions in the cities and head office over the next few days”
The cuts are in response to the ongoing impact the COVID-19 pandemic has had on India’s food deliver sector as people are more wary of ordering food in for both health and financial concerns. Sources familiar with the matter told TechCrunch that Swiggy is processing less than 1 million orders per day now, compared to the almost 3 million it did before the pandemic.
According to Majety’s email, all employees impacted by the cuts will receive at least three months of salary. They get an additional month for each year they have spent with Swiggy. The company will also provide medical and accident coverage through the end of the year.
This isn’t the the first time Swiggy has announced job cuts in recent months. At the end of April, Indian news outlet Entracker reported that the service was cutting staff and also scaling back its cloud kitchen division. TechCrunch’s sources indicate that while it’s unclear if these new layoffs are related to April’s announcement, they will happen mostly outside of Swiggy’s cloud kitchen operations.
The layoff announcement comes a little more than a month after Swiggy announced it had raised a $43 million as part of an ongoing Series I round of funding (the company has raised $1.42 billion in total).
Swiggy isn’t the only food delivery company laying off staffers in response to the COVID-19 pandemic. Just last week it was reported that Swiggy rival in India, Zomato, cut 13 percent of its workforce and was asking remaining employees to take a pay cut. Over in the UK, Deliveroo cut 15 percent of its staff at the end of April. And while Eats has been a bright spot for Uber, it too is scaling back and ceasing operations in eight different countries.
It’s unlikely that Swiggy’s will be the last layoff announcement to come from food delivery companies. The entire sector is going through tumult as restaurants close down altogether, local governments impose delivery fee caps, and shady business practices continue to come to light.
Yet at the same time, food delivery has never been more important. Even though some states are re-opening after shelter in place orders, experts are warning about a potential second wave of infections. Hopefully delivery business have learned these hard lessons and will be better prepared should we need them in another emergency.