Hit hard by the novel coronavirus pandemic, food delivery startup Zomato has announced that it will lay off 13 percent of its workforce and slash salaries of all its employees. Food and restaurant industry is the worst affected by COVID-19 crisis as the outlets have been closed since March 25 after Prime Minister Narendra Modi announced lockdown to contain the virus. Zomato Donates Rs 2.64 Crore to Support More Than 3,100 Restaurant Workers in India.

Deepinder Goyal, the founder of the food delivery app and CEO, said that the company will temporarily cut salaries by up to 50 percent starting June. “Our business has been severely affected by the COVID lockdowns,” Goyal said, referring to nationwide COVID-19 lockdown. Zomato Mandates Its Delivery Partners to Install Aarogya Setu App to Help Control the Spread of Coronavirus.

"Multiple aspects of our business have changed dramatically over the last couple of months and many of these changes are expected to be permanent. While we continue to build a more focused Zomato, we do not foresee having enough work for all our employees. We owe all our colleagues a challenging work environment, but we won’t be able to offer that to ~13% of our workforce going forward," Goyal said in a note to employees.

“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,” he added.

This development comes nearly a month after online food delivery platform Swiggy announced to lay off around 1,000 employees amid the crash in demand due to COVID-19 crisis. Going forward, both Zomato and Swiggy have started selling essential groceries and promote "contactless delivery" as the ailing restaurant market attempts to make a recovery.

(The above story first appeared on LatestLY on May 15, 2020 05:20 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).