Why Did Zomato Lay Off 600 Employees?
Zomato, the prominent online food delivery platform has laid off up to 600 customer support employees, just one year after bringing them on board.
The move has left many questioning the company’s priorities, especially as it faces challenges in maintaining its growth trajectory and battling rising losses within its quick-commerce subsidiary, Blinkit.
According to a report from Outlook Business on Tuesday, the layoffs are part of a larger effort by Zomato to streamline its operations and reduce costs.
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Sources close to the development claim that these job cuts come at a time when the company is struggling with slowdowns in its core food delivery business.
The food delivery giant, once considered one of the leading players in the Indian market, is now facing increasing competition and shifting market dynamics.
Zomato’s decision to cut customer support jobs appears to be driven by its attempts to leverage artificial intelligence (AI) for automation.
AI, which is now being integrated into customer support functions, is expected to play a pivotal role in reducing the company’s operating costs.
While automation has undoubtedly contributed to efficiency in several industries, it has also raised concerns about job displacement, particularly for employees in customer-facing roles.
What’s even more troubling for those affected by the layoffs is the manner in which the terminations were executed.
According to reports, the customer support staff was let go with minimal notice and were given only one month’s salary as compensation.
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Affected employees were cited for reasons such as “poor performance” and “punctuality,” though many have voiced frustrations over the lack of transparency behind the layoffs.
One current employee revealed to Outlook Business that a majority of those hired under Zomato’s Associate Accelerator Program (ZAAP) were let go within a short span of time, leaving many workers in limbo.
The ZAAP program was launched a year ago with the promise of providing employment opportunities for customer support roles.
Nearly 1,500 employees were recruited through the initiative, only to find themselves jobless in a matter of months.
The layoff decisions reportedly affected employees based in Zomato’s offices in Gurugram and Hyderabad, stoking fears among the remaining workforce about the stability of their own positions.
Discussions about the layoffs have started to flood social media platforms like Reddit and X where many users have shared their personal experiences with the company’s sudden firing spree. Zomato’s CEO Deepinder Goyal hasn’t responded yet.
Meanwhile, Zomato’s stock price has shown minor gains in the market with shares trading at ₹203.20 at the close of Tuesday’s trading session, up 0.84% from the previous day’s close of ₹201.50.
