Updated: May 16, 2020 12:01:04 pm
THE IMPACT of Covid19-led lockdown on the restaurant industry has started taking its toll on other stakeholders in the food chain, with Gurgaon-based online platform Zomato saying it does not “foresee having enough work” for all of its employees.
Consequently, the company has decided to ask around 13 per cent of its 4,000-strong workforce to look for new jobs. This is in addition to salary cuts across the board to maximum of 50 per cent.
“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,” Zomato CEO Deepinder Goyal wrote in a mail to the company’s employees.
“All our employees who no longer have any work at Zomato, will continue to be with us at 50% 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% of their time and energy towards looking for jobs outside of Zomato,” Goyal noted.
The country’s restaurant industry by itself is staring at an estimated 7.3 million jobs on the line as it counts its losses each hour, with its challenges ranging from supplies to labour, skilled and semi-skilled, real estate to credit, overheads and utilities, delivery commissions and rental contracts.
A number of small and large restaurants have shut shop and the remaining await announcements on the lifting of the lockdown.
Goyal wrote in his e-mail the company should focus on building for “the new normal”. “All of this uncertainty inevitably needed us to re-define our business strategy. There’s no going back to the ‘normal’ – all we should focus on is building for the ‘new normal’. Considering what we know at this point, the idea is to make a complete shift towards being a transactions first company,” he wrote, adding the company needs to preserve as much cash as possible if the business environment worsened, or continued to be the same for rest of the year.
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