Food-delivery startup Swiggy is likely to fire 400 employees or nearly 7% of its workforce, sources said, adding to the list of tech startups that are handing out pink slips at the start of the year.
Swiggy is reportedly planning to hit the public markets this year, and needs to reign in costs prior to filing draft papers with the regulator. In FY23, the company posted a nearly 80% jump in losses to $545 million, as per documents filed by its investor Prosus.
However, its revenues rose to around $900 million, from $600 million in FY22, while its food delivery business also turned profitable last year. This leaves its quick commerce platform Instamart, which the company expects to turn profitable by March-April, as per media reports.
Its rival Zomato, which went public in 2021, said its quick commerce business Blinkit will achieve break-even in the first quarter of FY25, after turning contribution positive in Q2FY24.
Swiggy is also teasing a platform fee of Rs 10 on its app in select cities, signaling posibility of another platform fee hike from Rs 5 in a bid to hit its profitability goals. The company had initially introduced the platform fee in April 2023, followed by Zomato.
At a similar time last year, Swiggy had fired 380 employees in a move to conserve cash after it had admitedly over-hired. In an email to employees, the company’s co-founder and chief executive Sriharsha Majety had said the company had to advance its timeline for profitabillity and needed to re-visit overall indirect costs.
Recently, one of Swiggy’s investors Invesco marked up its valuation to $7.85 billion, after slashing its valuation twice to $5.5 billion earlier in the year. Swiggy had hit its highest valuation of $10.7 billion after a $700 million round in January 2022.