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Zomato lays off 13% workforce and up to 50% salary will be cut for the rest of the employees due to the pandemic. Wikimedia Commons

Hit hard by the Covid-19 pandemic, Zomato CEO Deepinder Goyal on Friday announced to lay off nearly 13 per cent of its workforce — over 600 employees — via Zoom calls, along with salary cuts for the rest of the employees for at least the next six months starting June, with higher cuts going up to 50 per cent for people in senior roles.

Stressing that the company needs to prepare itself for things getting worse, Goyal said that multiple aspects of his business have changed dramatically over the last couple of months and many of these changes are expected to be permanent.


“While we continue to build a more focused Zomato, we do not foresee having enough work for all our employees. We owe all our colleagues a challenging work environment, but we won’t be able to offer that to 13 per cent of our workforce going forward,” he said in a detailed statement.

Over the next couple of days, the company will get on Zoom video calls with the impacted employees to walk them through the next steps and help them find jobs as soon as possible.

“All our employees, who no longer have any work at Zomato, will continue to be with us at 50 per cent salary for the next 6 months,” said Goyal.


To conserve cash flows, hundreds of Zomato employees have taken deep voluntary salary cuts as hinted by Goyal in March. (Representational Image). Pixabay

“Some impacted employees work with us through manpower agencies and not directly on our payroll. We are going to help these agencies support these employees with two months of severance (vs 15 days of contractual obligation),” he added.

In March, Goyal had hinted that to conserve cash flows, hundreds of Zomato employees have taken deep voluntary salary cuts.

Zomato is offering those who are laid off to keep their company-issued laptops and phones (if any), saying that previously allocated ESOPs will continue to vest “during this period of 6 months, as all these people will remain on our payroll with reduced pay”.

Starting June, said Goyal, the company proposed a temporary reduction in pay for the entire organisation.

“Lower cuts are being proposed for people with lower salaries, and higher cuts (up to 50 per cent) for people with higher salaries,” informed Goyal.

If someone has already taken a voluntary cut equal to or more than the proposed temporary reduction in pay, he or she will not be expected to take an additional cut.

“This temporary reduction in pay will also be eligible for 2x ESOP grants just like the earlier voluntary cuts. I foresee (and hope) this to be around 6 months from now,” said the Zomato CEO.


Many restaurants remain shut due to the pandemic, which has severely affectedZomato’s business. Pixabay

Zomato’s business has been severely affected by the Covid-19 induced lockdown as a large number of restaurants have already shut down permanently.

“I expect the number of restaurants to shrink by 25-40 per cent over the next 6-12 months. What actually happens, for better or worse, is anybody’s guess,” Goyal said.

He, however, said that the company’s burn rate is significantly down from the pre-Covid levels.

Read More: “We Have to Learn to Live With COVID-19”, Says Delhi Health Minister Satyendar Jain

“We are, however, going to prepare ourselves for things getting worse. Covid-19 has been a black swan event for the world economy; and we do not yet know if we have hit the global minima in this journey with the virus,” said Goyal.

“Therefore, we need to make sure that we preserve as much cash as possible to weather the storm if the business environment gets worse, or continues to be the same for the rest of the year or more,” he added.

Zomato has over 150 offices globally.

Goyal also announced plans to make partial or full work from home a permanent feature.

This includes full-time work from home or at the field (for sales teams, office presence is only required for large team meetings, gatherings, performance reviews), part-time work from home (some days in office, other days at home), and work from office (all days in office). (IANS)


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