Startup layoffs: Swiggy may slash workforce after 2-fold rise in losses

The Indian startup ecosystem has been hit by strikes and criticism over working conditions of delivery partners and drivers. Swiggy is among only three Indian startups which are paying sustainable minimum wage to gig workers on contract. But it seems that the food delivery giant is struggling to sustain its own business, as its losses have surged to Rs 3,629 crore in FY22, which is a two-fold increase.

The development which hints at possible layoffs in the year to come, comes despite a similar rise in revenue which has surpassed Rs 5,700 crore. At the same time, fresh investments catapulted Swiggy's valuation above $10 billion, to help the unicorn become a decacorn. The threat of job cuts is real since earlier reports had suggested that the firm may fire 250 employees in December.

A quarter of the costs for Swiggy constituted of outsourcing support expenses, as it doubled to Rs 2,350 crore in FY22, as compared to the previous year. But there was a whopping four-fold rise in advertisinig expenses, which reached Rs 1,848.7 crore. But losing marketshare to Zomato despite giving discounts, hasn't helped Swiggy's revenues.

Swiggy has also been spending on expansion, with moves such as the acquisition of restaurant tech platform Dineout.