Online restaurant guide and food ordering platform Zomato on Friday said it is going to layoff around 13 per cent of its workforce and announced pay cuts up to 50 per cent across its workforce for a period of six months, starting from June onwards.

The Covid-19 caused lockdown has taken its toll on the restaurant industry and therefore, its related stakeholders are suffering too, which is resulting in job and pay cuts.

It is worth noting, that Zomato’s decision comes at a time when country’s third phase of lockdown is about to end and as per Prime Minister Narendra Modi’s announcement made earlier on Tuesday, it seems like government may further loosen its restrictions, which will allow restaurant industries to restart their functions.

In a blog post, Zomato Founder and CEO Deepinder Goyal said multiple aspects of the company’s 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 focussed 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 around 13 per cent of our workforce going forward,” he added.

Goyal said he along with COO and co-founder Gaurav Gupta and CEO Food Delivery Mohit Gupta would be getting on video calls over the next couple of days with impacted employees to walk them through the next steps and help find them jobs as soon as possible.

Employees who are getting lay-offs will get zoom call invites, which will be attended by top executives. “Everyone who is impacted will get invites for a zoom call with the leadership team within the next 24 hours,” he said.

“For everyone who is not impacted – an email from hr@zomato.com in the next 6 hours should tell you that your jobs are here to stay.”

On the financial support to these employees, he said: “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. During this time, outside of the handover period of 1-2 weeks, we expect these folks to spend 100 per cent of their time and energy towards looking for jobs outside of Zomato”.

Goyal also said the company will provide them outplacement support and also health insurance for 6 months or as soon as they find another job.

Previously allocated employee stock ownership plans (ESOPs) will continue to vest during this period of 6 months, he added.

Goyal also said, “Starting June, I am proposing 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”.

Zomato expects these cuts to be discontinued as soon as the economy starts getting back on track. “I foresee and hope this to be around 6 months from now,” he added.