Food aggregator platform Zomato, on Friday, has announced to lay off 13 percent or around 520 employees of its total workforce of 4000 employees to reduce the impact on the business caused by coronavirus pandemic. Zomato will continue to give 50 percent salary and health insurance to the affected employees for the next six months or until they get a new job, whichever is earlier.
The company has also decided to include a temporary salary cut of up to 50 percent for the rest of the employees. The temporary salary cut will be also eligible for a 2x employee stock ownership plan (ESOP) grant. Zomato is expecting to discontinue the salary cuts once the economy goes back to normal.
Deepinder Goyal, Zomato Founder, and CEO wrote in an email to its employees, Our business 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.”
He added, “Our burn rate is significantly down from pre-COVID levels. We have enough capital to continue growing our business – are financially stable and have a very generous amount of runway in the bank (which is continuing to improve as we bring our burn rate down).”
Zomato is also seeking to reduce real estate costs by making partial or full-time work from home a permanent feature. Currently, Zomato has over 150 offices globally, in which most of the spaces are occupied by sales and logistics teams.
