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As demand declines Swiggy temporarily suspends 500 cloud kitchen staff

Bengaluru based startup Swiggy which is an online food delivery app, also cloud kitchen is planning to lay off around 500 cloud kitchen staff. Mostly those employee who agreed on company’s contract. It says that it will conserve money and increase its runaway.
This decision will take place from its cloud kitchens across nearly ten tier in 1 and 2 cities which mainly operates swiggy’s owned homely and The Bowl company.

As food delivery application is very important and essential in this lockdown pandemic, many restaurants and cafes has been shut to prevent or having a fear of this deadly virus coronavirus. This has impact on swiggy’s cloud kitchen business, which is depends mostly on ground workers like kitchen staff and delivery workers.

“There were some cuts on jobs with respect to efficiency; this was however sanctioned by the board pre-covid time itself. Around 4 to 5 months ago, we were beginning to end the contracts with cloud kitchen brands that were not efficiently able to service demand,” said by Swiggy executive.
The first report for Swiggy suspends 500 cloud kitchen staff comes out on Tuesday on Digital news.

At present, Swiggy won’t cut off any workers or employee salary, as it has been told there won’t be any appraisal this year.
Swiggy Executive also said “We are honoring all job offers, and in fact, we are hiring for some roles right now. There will be promotions, but mostly nothing when it comes to hikes.”

Swiggy also leases out some of their kitchen spaces to independent restaurant owner. Recently, swiggy end the contract with the restaurant owner whose ratings are least, and also who didn’t see any revenue efficiency.
25% of commission is taken by Swiggy on each and every order which is served. This is much higher than 15-20% commission on the market place.

In a recent interview, swiggy said that they are currently not operating food delivery app in around 300-odd Tier 3 and Tier 4 cities due to various challenges because of this coronavirus pandemic. But they are covering this loss by delivering groceries and essentials need.

Swiggy Spokesperson said “As the lockdown gets further extended, we are evaluating various means to stay nimble and focused on growth and profitability across our kitchen. These include renegotiating contracts with landlords, relocation of certain kitchens to more optimal locations and discontinuing operations at a few kitchens that have been severely impacted. This will unfortunately have an impact on a certain number of kitchen staff who will be fully supported during this transition.”
People who are close to swiggy arch-viral Zomato said the Gurugram based food tech player may also scale down operations in some cities.

Zomato said “We are not looking to layoff for our cloud kitchen category, since we provide this infrastructure as a service and have less than five people in this team. The orders are at about 40-50% normal levels, and about 25% of restaurants are optional right now.”

Rituparna Chakraborty, co-founder and senior vice-president of TeamLease said “Even in a non-covid scenario, the likes of swiggy and Zomato realized that they have to showcase return on the investment made on them, and were looking to run in a lean manner. This trend can be seen across every tech startup today. If there are expenditure cuts, then this should be carried out across the whole workforce.”

Vanishri Deshpande, founder and CEO of HR tech Spottabl said “Hyperlocal and operation heavy businesses are seeing a drop in demand which may lead them to drop in demand which may lead them to drop their on-ground contractual workforce significantly. But considering supply chain issues this is really the time for them to merge their fleet operations.”

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