Zomato Fires 13% of Workforce, Rest To Get 50% Pay Cut
Tremendously thud by the COVID-19 pandemic, Zomato CEO Deepinder Goyal on Friday declared that the company will lay off almost 13 percent of its workforce – over 600 employees – through zoom calls, besides salary cuts for at least the future six months initiating in June, with in fact higher cuts in salary for senior roles.
Over the stress of the company preparing itself for things getting worse, Goyal stated that multiple aspects of his business have varied dramatically over the last few months, with few of these changes are expected to remain permanently.
In a couple of days the company is expected to get on zoom video calls with the impacted employees to provide them a brief outlook about what steps to follow next and help them find jobs as early as possible.
All our employees, who no longer have any work at Zomato, will continue to be with us at 50 percent salary for the next 6 months”, Goyal mentioned.
“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 further.
Goyal had evidently shown, in March, that to conserve cash flows, hundreds of Zomato employees have moreover taken deep voluntary salary cuts.
It is offering people who are desisted to keep their company-issued laptops and mobile phones (if any), pronouncing that previously allocated ESOP’s will continue to vest, “during this period of 6 months, as all these people will remain on our payroll with reduced pay.”
Initiating from June, said Goyal, the company placed a proposition for the temporary reduction of payment for the entire organization.
“Lower cuts are being proposed for people with lower salaries, and higher cuts (up to 50 percent) for people with higher salaries,” stated Goyal.
Also, if anybody has taken a voluntary cut equal or more than the proposed reduction in pay temporarily, he or she will not be, furthermore, expected in taking 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.
Zomato’s business has already been severely and majorly affected by the COVID-19 lockdown that has caused numerous restaurants to shut down permanently.
“I expect the number of restaurants to shrink by 25-40 percent over the next 6-12 months. What actually happens, for better or worse, is anybody’s guess,” Goyal said.
Nevertheless, he stated that the company’s burn rate is very momentously down from the pre-Covid levels.
“We are, however, going to prepare ourselves for things getting worse. Covid-19 has been a black swan event for the world economy; we do not yet know if we have hit the global minima in this journey with the virus,” Goyal informed.
“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 further added.
Zomato’s offices exceed 150 globally. Goyal declared plans to make full or partial work from home a characteristic that will permanently remain.
This has full-time work from home or at field in inclusion (for sales teams, office presence is only necessary for gigantic team meetings, performance reviews, gatherings), part-time work from home (few days in office, and few in home), and work from an office (all days in the office).