Zomato, one of India’s leading food delivery platforms, has let go of 600 employees from its customer support team.
This decision comes as the company faces slowing growth in its core food delivery business and mounting challenges in its quick commerce arm, Blinkit.
The layoffs, which primarily affected contractual workers, highlight the shifting dynamics in the food delivery industry and Zomato’s efforts to optimize operations.
Background and Context of Layoffs at Zomato
The layoffs are part of Zomato’s Zomato Associate Accelerator Program (ZAAP). This program was launched a year ago to hire and train customer support associates.
The program aimed to offer employees opportunities for career advancement.
These roles included areas such as sales, operations, program management, and other functions within a year.
However, a majority of these contractual workers did not receive renewals at the end of their tenure, leading to the termination of 600 employees.
The layoffs have raised concerns among employees, with some alleging that the termination process lacked transparency.
Reports indicate that Slack messages informed employees of their dismissal, and Zomato offered them two months’ salary as compensation.
Some employees claimed that the reasons for termination were vague, citing minor attendance lapses or AI-generated performance assessments as factors.
Reasons Behind the Layoffs
Several factors contributed to Zomato’s decision to downsize its customer support team:
- Slowing Growth in Food Delivery: The food delivery market has experienced a slowdown, impacting Zomato’s revenue and growth prospects.
- Automation and AI Integration: Zomato has increasingly relied on AI-powered customer support platforms, such as its in-house developed tool “Nugget,” which handles over 15 million monthly interactions and resolves up to 80% of customer queries without human intervention.
- Cost Optimization: The company is focusing on reducing operational costs and improving efficiency to navigate the challenging market conditions.
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