Foodtech company Zomato said it was laying off 13 percent of its 4000-strong workforce as it sees the restaurant industry shrinking by 25-40 percent in the next 6-12 months.

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Zomato CEO and co-founder Goyal said the affected employees will continue to get 50 percent of salary for the next 6 months, along with outplacement support and health insurance.

Goyal informed employees on Friday about the move towards a “more focused Zomato” which will rely “heavily on a small number of large market opportunities in the food value chain.“

“Our business has been severely affected by the COVID lockdowns. I expect the number of restaurants to shrink by 25-40 percent over the next 6-12 months,” Goyal said.

The Zomato co-founder said that while the company had a stable financial runway for now, employees would have to prepare for “things getting worse.”

“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 percent of our workforce going forward,” Goyal said.

The company is also going to see a temporary reduction in pay for the entire organisation starting June.

“Lower cuts are being proposed for people with lower salaries, and higher cuts (up to 50 percent) for people with higher salaries,” the blog said.

The organisation is also set to make work-from-home a permanent feature based on teams and roles.

“Our highest recurring expense today (outside of payroll) is real estate. We have 150+ offices globally, most of which are spaces for our sales and logistics teams. Given how well we have been working from home, we have decided to make partial or full work from home a permanent feature of our lives,” Goyal said.

First Published:May 15, 2020 3:37 PM IST