Flush with new funds, Indian startups lead in sacking employees
According to a survey by IT industry body Nasscom this month, 90 per cent tech startups in India are facing a decline in revenues due to the impact of COVID-19 pandemic. About 30-40 per cent have already temporarily halted their operations or are in the process of closing down
Source | retail.economictimes.indiatimes.com | IANS
NEW DELHI: The Covid-19 blow appears to have forced even those startups and unicorns that have managed to raise new funding go for a leaner workforce, firing employees in thousands.
Foodtech unicorn Swiggy, for example, raised almost Rs 1,185 crore this year as part of its Series -I round.
And yet, the company had to announce its plans this month to let go of 1,100 employees, nearly 14 per cent of its workforce, spanning across grades and functions in the cities and head office as Covid-19 continues to hurt its business across verticals.
“The biggest impact here is on the Cloud kitchens business, with many unknowns about volumes through the year. Since the onset of Covid-19, we have already begun the process of shutting down our kitchen facilities temporarily or permanently, depending on their outlook and profitability profile,” Sriharsha Majety, Co-founder and CEO, Swiggy, said in a statement announcing the lay offs.
Similar is the story of Zomato, another unicorn, which is Swiggy’s major rival in the India market.
Zomato, which is also a favourite among investors, also got hit hard by the COVID-19 pandemic, leading it to announce the decision to lay off nearly 13 per cent of its workforce — over 600 employees.