Swiggy loss widens to Rs 3,628.9 crore in FY22; More layoffs expected as cost cutting measure

Food ordering and grocery delivery service platform Swiggy's net loss for FY22 widened more than two times and came at Rs 3628.9 crore as compared to Rs 1,617 in the corresponding period a year ago. The company's financial report has raised concerns about more layoffs owing to cost cutting measures.

According to a news report by PTI which quoted financial data accessed by the business intelligence platform Tofler, Swiggy's total expenses have shot up 131 percent to Rs 9,574.5 crore in FY22.

In FY22, outsourcing support cost accounted for 24.5 percent of the company's expenses, up 2.3 times from Rs 1,031 crore in FY21, as per data from Entrackr. Swiggy’s advertising and promotional expenses too surged 4 times to reach Rs 1,848.7 crore during FY22, according to the report.

Last month, The Economic Times had reported that Swiggy is likely to fire 250 people, ranging from supply chain to operations to customer service.

Meanwhile a Swiggy spokesperson had said that, "There have been no layoffs at Swiggy. We concluded our performance cycle in October and have announced ratings and promotions at all levels. As with every cycle, we expect exits based on performance."

So the company’s loss widening in FY22 could indicate that layoffs are likely to happen to reduce cash burn.

Jefferies reported in November that Swiggy was losing market share to its rival Zomato despite offering heavy discounts.

Citing Swiggy investor Prosus' financial report, Jefferies said that the gross value of Swiggy's food delivery business was $1.3 billion in the January-June period of 2022.

Swiggy's rival Zomato had logged gross order volume of $1.6 billion in the same period. Earlier last year, Swiggy acquired Dineout, a restaurant tech platform, for an estimated $200 million. Swiggy also raised $700 million led by Invesco at a $10.7 billion valuation which had turned it into a decacorn.

Meanwhile, Swiggy is also rumoured to be going for an IPO which will be released this year. Swiggy had formally launched the IPO process last year by hiring investment banks JP Morgan and ICICI Securities as lead managers.