Swiggy is set to lay off scores of employees working in its cloud kitchens as the number of orders has been in a free fall since the start of the lockdown last month. It is also looking to close some of its private label cloud kitchens while working to relocate some kitchens.

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Startup news portal Entrackr reported on Tuesday that 800-900 employees in Swiggy's cloud kitchen business may be asked to leave.

Swiggy runs 1,000 kitchens across nearly 15 cities under its Swiggy Access programme, but majority of them are run by restaurant partners. The affected employees will be only from the company’s private label kitchens, a person in the know said. They will be asked to leave by May, the person added.

Swiggy confirmed that some of its cloud kitchen employees will be impacted and that the company was also looking to discontinue operations at a few kitchens.

“As COVID-19 disrupts daily life across the country, the hospitality industry has come under severe pressure. As the lockdown gets further extended, we are evaluating various means to stay nimble and focused on growth and profitability across our kitchens. These include renegotiating contracts with landlords, relocation of certain kitchens to more optimal locations and discontinuing operations at a few kitchens that have been severely impacted since the lockdown came into effect,” Swiggy said in a statement.

“This will unfortunately have an impact on a certain number of kitchen staff who will be fully supported during this transition," the company added.

The development comes despite Swiggy investing Rs 250 crore into setting up cloud kitchens for restaurant partners. The company in November last year had said its cloud kitchens would help create 8,000 direct and indirect jobs.

The company had started its cloud kitchens initiative in 2017.

“Swiggy has invested over Rs 175 crore towards setting up and running these kitchens. This success has encouraged us to invest an additional Rs 75 crore to bring more partner cloud kitchens in 12 new cities by March 2020,” the company said in a statement back in November 2019.

First Published:Apr 21, 2020 5:15 PM IST