Zomato lays off 13% of its workforce, announces pay cuts for all – CEO Deepinder Goyal says 40% of their restaurants could shut down in 12 months
Zomatofounder and CEO Deepinder Goyal said that the company does not foresee having enough work for all employees.
- Goyal also announced pay cuts for the entire organization.
- The company has also decided to make partial or full work from home a permanent feature to cut down on real estate costs.
Goyal also announced pay cuts for the entire organization. “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%) for people with higher salaries,” he wrote.
He also said that many employees had already offered a voluntary pay cut of 100%. “This temporary reduction in pay will also be eligible for 2x ESOP grants just like the earlier voluntary cuts,” he wrote.
Enough money in the bank
The paycuts and the job cuts come at a time even when the founder admitted that the company is financially stable. Goyal said that Zomato’s burn rate is significantly down from pre-COVID levels and that they “have a very generous amount of runway in the bank”.
The founder of the unicorn startup announced these decisions at the wake of the coronavirus pandemic. He said that the company will now have a more focussed approach. Goyal said that he anticipates only darker times ahead.
“Our business has been severely affected by the COVID lockdowns. A large number of restaurants have already shut down permanently, and we know that this is just the tip of the iceberg. I expect the number of restaurants to shrink by 25-40% over the next 6-12 months. What actually happens, for better or worse, is anybody’s guess,” he wrote.
The company has also decided to make partial or full work from home a permanent feature to cut down on real estate costs.
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