Zepto's cost-cutting drive affects around 300 employees
What's the story
Zepto, a leading player in the quick commerce sector, has transitioned around 300 employees to third-party service providers as part of its cost-cutting drive, according to Moneycontrol. The move comes amid an increasingly competitive market and follows a recent $450 million funding round that valued the company at $7 billion. The transitions affected various divisions, including operations, tech, category management, and finance.
Cost reduction
Employees transitioned to 3rd-party service providers
The employees have been transitioned from Zepto's payroll to third-party service providers working with Zepto. This is part of the company's strategy to reduce its monthly fixed costs while maintaining productivity. A company spokesperson said, "We are building a culture of cost excellence regardless of how large our balance sheet is." The firm has also automated many operational tasks in-house for cost efficiency.
Workforce impact
Layoffs of 1,000 employees since January
Since the beginning of this year, Zepto has impacted a total of 1,000 employees. Most of these were from the customer support team, which is being automated to a great extent. Some tech and support staff have been moved to quality assurance teams in an effort to retain as many employees as possible amid these changes.
Future plans
CEO emphasizes cost reduction and frugality
Zepto is also looking to drive efficiencies across the board. In a recent employee town hall, co-founder and CEO Aadit Palicha said the company will "obsess over costs" and be "very frugal." He added that they plan to reduce their Amazon Web Services (AWS) spending, cut software expenses, and build dashboards in-house instead of relying on third-party services.
Hiring approach
Plans to freeze hiring and maintain headcount
Palicha also revealed that Zepto will be "very tight on hiring" and try to double its business with the same headcount. The company currently has around 5,700 employees on its payroll after the recent changes. It plans to maintain a similar headcount in the future, treating "every hiring like a privilege now."