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Swiggy to lay off 1,100 employees as COVID-19 hits online food orders

BENGALURU (Reuters) - Indian food delivery startup Swiggy said on Monday it would lay off 1,100 employees, or nearly 14% of its workforce, to cut costs, as a weeks-long nationwide lockdown to curb the coronavirus outbreak hits demand for online food ordering.

The company, backed by South African internet giant Naspers NPNJn.J, also said it will scale down adjacent businesses and has already shut several of its cloud kitchens - facilities that only cater to takeaway orders - temporarily or permanently.

“The core food delivery business has been severely impacted and will stay impacted over the short term, but is expected to start growing again after that,” said Sriharsha Majety, co-founder and chief executive at Bengaluru-based Swiggy.

Swiggy, one of India’s best known startups, is among many that are laying off employees and reshaping their business in response to the COVID-19 pandemic, which has forced 1.3 billion Indians indoors and crippled business.

India is currently under a two-month lockdown, and though several curbs are being eased, public places such as restaurants remain closed, hurting restaurants themselves as well as companies such as Swiggy and main rival Zomato.

Zomato on Friday announced it was laying off more than 500 employees, or 13% of its total workforce.

Swiggy, which had about 8,000 employees on its payroll as of October last year, said it would provide three months of salary to all impacted workers.

Reporting by Sachin Ravikumar; Editing by Rashmi Aich

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