Zomato has recently laid off around 600 customer support associates, marking a significant shift in its employment strategy. These layoffs occurred within a year of hiring under the Zomato Associate Accelerator Program (ZAAP), which aimed to transition employees into various roles within the company. The redundancies were primarily reported in the company’s Gurugram and Hyderabad offices.
ZAAP was designed to provide new opportunities for employees in diverse functions such as sales, operations, and program management. However, many of the contractual employees did not see their contracts renewed, leading to unexpected job losses.
“A majority of employees hired under Zomato’s ZAAP program last year have been let go over the last week or so without any clear explanation,” a customer support employee stated.
The layoffs have been attributed to a slowdown in Zomato’s core food delivery business and rising losses in its quick commerce subsidiary, Blinkit. Additionally, Zomato has been investing in automation to cut costs, including the development of an AI-powered customer support platform, Nugget. This platform can manage over 15 million interactions monthly and resolve up to 80% of customer queries without human intervention.
Affected employees were offered a month’s salary as compensation but were terminated without any notice period. Some of the reasons provided for these layoffs included poor performance and punctuality issues. “I never thought I’d be writing this, but here we are. Today, I was fired from Zomato for what I can only describe as a ridiculous and unfair reason,” shared a former employee on social media.
In December 2022, Zomato had previously laid off about 100 employees, nearly 4% of its workforce, across various departments. Current staff express concerns about job security and the increasing reliance on automation, which has reduced the need for human intervention in customer support roles.
Despite the layoffs, Zomato’s shares rose by 0.84% following the announcement, suggesting investor confidence in the company’s cost-cutting measures.
The atmosphere within the company is reportedly tense, as employees worry about future prospects amidst these changes.