Hit hard by coronavirus crisis, Zomato lays off 13% workforce, 50% salary cut for rest
New Delhi | Jagran Business Desk: In a shocking decision, restaurant aggregator Zomato on Friday said that it has decided to lay off around 13 per cent of its employees along with salary cuts of up to 50 per cent across its workforce for six months starting June.
Speaking about the coronavirus crisis, Zomato CEO Deepinder Goyal said that the company needs to prepare itself for the worst, adding that multiple aspects of the business have changed dramatically over the last couple of months and many of these changes are expected to be permanent because of the pandemic.
"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 per cent of our workforce going forward," said Goyal, as reported by news agency IANS.
Over the next couple of days, the company will get on Zoom video calls with the impacted employees to walk them through the next steps and help them find jobs as soon as possible, he said.
"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 (vs 15 days of contractual obligation)," IANS quoted Goyal as saying.
"This temporary reduction in pay will also be eligible for 2x ESOP grants just like the earlier voluntary cuts. I foresee (and hope) this to be around 6 months from now," he added.
The coronavirus pandemic has severely impacted Zomato's business as a large number of restaurants have already shut down permanently. Speaking about this, Goyal said that he is expecting the number of restaurants to shrink by 25-40 per cent over the next 6-12 months. Though, he said that the company's burn rate is significantly down from the pre-COVID levels.
"We are, however, going to prepare ourselves for things getting worse. COVID-19 has been a black swan event for the world economy; and we do not yet know if we have hit the global minima in this journey with the virus," he said.
"Therefore, we need to make sure that we preserve as much cash as possible to weather the storm if the business environment gets worse, or continues to be the same for the rest of the year or more," he added.
(With inputs from IANS)
Posted By: Aalok Sensharma