Zomato Founder and CEO Deepinder Goyal, in a note to employees, said, “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.”
Deepinder said the reduced salary for its employees will be effective starting from June.
“Starting June, I am proposing a temporary reduction in pay for the entire organisation. Lower cuts are being proposed for people with lower salaries, and higher cuts (up to 50 percent) for people with higher salaries,” he said.
The Zomato founder expects that these cuts in salary will be revised as soon the economy starts getting back on track. “I foresee (and hope) this to be around 6 months from now,” he said.
According to Deepinder, the lockdowns due to coronavirus pandemic has severely affected its business with large number of restaurants shutting down permanently and he expects this to shrink further by another 25-40 percent in the next six to 12 months.
The affected employees of Zomato will continue to receive support from the company in four areas: financial, outplacement support, healthcare, and equity.
According to Zomato, all those employees who no longer have any work at Zomato will continue be with them on 50 percent salary for next six months.
The food delivery unicorn will also provide outplacement services for the affected employees.
Zomato also announced that the previously allocated ESOPs will continue to vest during this period of six months. It said it will continue with the current insurance cover.
Deepinder said, “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.”