IPO-bound food delivery startup Swiggy is gearing up for a second round of layoffs, aiming to cut 400 employees in a strategic restructuring move. This move follows a previous round in January 2023, where the Bengaluru-based food tech giant had laid off 380 employees and closed its meat marketplace to trim operational costs.
Impact on Workforce and Departments
The impending cost-cutting drive is anticipated to impact approximately 7 percent of Swiggy's workforce, which currently stands at around 6,000 employees. Among the hardest-hit departments are expected to be the tech, call center, and corporate teams, signaling a comprehensive effort to streamline the company's operations, as per the media reports.
IPO Plans and Investment Banking
Interestingly, this cost-cutting initiative comes at a crucial juncture when Swiggy is actively preparing to go public later this year. Reports indicate that the company has already engaged investment bankers, underlining its commitment to a successful IPO. Despite the layoffs, Swiggy remains focused on its larger goal of achieving financial stability and market positioning.
Flipkart's Annual Restructuring: 1,000 Employees to be Let Go
In parallel news, Walmart-owned Flipkart is set to undertake its annual restructuring move, intending to release approximately 1,000 employees, constituting around 5 percent of its total workforce, as reported by media. Flipkart, headquartered in Bengaluru, boasts a workforce of approximately 22,000 employees, excluding those associated with its subsidiary, e-commerce fashion portal Myntra.
Performance-Based Job Cuts and CEO's Assurance
It's crucial to note that Flipkart routinely engages in performance-based job cuts as part of its annual restructuring strategy. During a recent townhall with employees on January 25, Flipkart CEO Kalyan Krishnamurthy reassured the workforce that the company's financial health is on an upward trajectory. He emphasized that Flipkart is expected to be in significantly better shape by the end of the year.
IPO Timing and Business Segments Performance
While Flipkart's IPO plans are still in the pipeline, there are hints that the public offering might be delayed until 2025. This potential delay is attributed to a strategic decision, anticipating improved unit economics. Sources suggest that Flipkart's Grocery business is showing positive momentum and robust growth. Krishnamurthy reportedly highlighted the success of Flipkart's mobile app business, stating that it is now turning profitable and performing well in the market.
As both Swiggy and Flipkart embark on significant workforce restructuring initiatives, their respective paths toward IPOs seem to be intertwined with efforts to enhance financial health and streamline operations. These developments underscore the dynamic landscape of India's tech and e-commerce sectors, where companies are strategically aligning their resources in preparation for public offerings and long-term sustainability.
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