Coronavirus: Swiggy to downsize private brand kitchens, to impact around 900 employees

Food ordering and delivery platform Swiggy is planning to downsize operations of its private brand kitchens due to COVID-19 pandemic, which could impact around 900 employees, according to sources.

As per sources in know of the matter, around 900 employees would be affected by the decision of the company.

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The company, however, did not share any details about the number of employees likely to be impacted.

"As COVID-19 disrupts daily life across the country, the hospitality industry has come under severe pressure. As the lockdown gets further extended, we are evaluating various means to stay nimble and focused on growth and profitability across our private brand kitchens," a Swiggy spokesperson said in a statement.

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 since the lockdown came into effect, it added.

"This will unfortunately have an impact on a certain number of kitchen staff who will be fully supported during this transition," the statement said.

On Monday, Telangana Chief Minister K Chandrashekhar Rao announced a ban on the operations of food delivery platforms like Swiggy and Zomato in the state until the end of the coronavirus lockdown. He added that the ongoing lockdown in the state may be extended to May 7.

Telangana has over 800 cases, with close to 20 deaths. The decision was taken after a 19-year old restaurant employee in Delhi’s Malviya Nagar tested positive for COVID-19 last week.

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Swiggy added that while the food delivery services are no longer operational in Telangana, their grocery delivery is open in the state.

Even with Swiggy having Swiggy Stores, and Zomato offering Zomato Market, the app ban will be a big blow to the foodtech unicorns. Hyderabad is one of the biggest markets for foodtech players. Food delivery as a service has seen a 10-20 percent drop from the second week of March, according to a RedSeer report.

(Disclaimer: Additional background information has been added to this PTI copy for context)