In a bid to streamline operations and cut costs ahead of its upcoming initial public offering (IPO), Swiggy, the prominent food delivery platform, is set to lay off approximately 400 employees, constituting around 6% of its total workforce. Sources suggest that the restructuring process, initiated last month in Bengaluru, is ongoing and may impact departments such as sales, customer service, and technology.
According to insiders, the restructuring aligns with the company’s renewed focus on profitability, as emphasized during a town hall held late last year. The layoffs are anticipated to exert the most significant impact on the customer support and technology teams, with apprehensions of further cuts in these areas.
This marks the second round of layoffs for Swiggy within a year, following the restructuring exercise in January 2023, where 380 employees were let go. The current move reflects the company’s efforts to present improved financial figures ahead of filing its draft papers for the IPO.
Investors, including Prosus and SoftBank, are reportedly pressuring Swiggy CEO Sriharsha Majety to demonstrate profitability before submitting the draft red herring prospectus (DRHP) for the IPO. With ambitions for significant returns, these investors are closely monitoring Swiggy’s financial performance.
Despite posting a consolidated net loss of INR 3,629 Cr in FY22, Swiggy aims to showcase positive financial trends. CEO Sriharsha Majety announced in 2023 that the food delivery business achieved profitability as of March the same year. Swiggy is actively diversifying its offerings, with a notable focus on the quick commerce business, Instamart, which is expected to contribute substantially to the company’s revenue.
The employee layoffs coincide with the company’s decision to halt the planned increase in platform fees from INR 5 to INR 10, showcasing Swiggy’s strategic maneuvers amid evolving market dynamics.
