Indian food delivery startup Zomato cuts 13% of workforce

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Zomato, an India-headquartered food delivery startup, is cutting 13% of its workforce as it looks to reduce cost and tide the coronavirus crises that has made many cautious about ordering food online.

The 11-year-old firm did not disclose the exact number of people it was letting go, but the number could be as high as 1,200 based on an analysis of its LinkedIn profile. Zomato said it would provide those affected with half of their salaries for six months or until they find a job elsewhere — whichever happens first.

Deepinder Goyal, co-founder and chief executive of Gurgaon-based firm, said Zomato has been “severely affected by the COVID lockdowns.”

“A large number of restaurants have already shut down permanently, and we know that this is just the tip of the iceberg. I expect the number of restaurants to shrink by 25-40% over the next 6-12 months. What actually happens, for better or worse, is anybody’s guess,” he wrote in a blog post.

Today’s announcement follows a similar move by Swiggy, India’s largest food delivery startup, which cut about 1,000 jobs last month. Both the startups are seeing fewer than a million orders placed on their platforms, down from nearly 3 million they were handling before the outbreak.

Both of them have also expanded their businesses. Zomato, which recently started to delivery grocery items, said it is now serving this category in 185 cities in India and plans to launch this offering in UAE and Lebanon.

More to follow…