Zomato sacks 541 employees as improved automation made them 'redundant'
Online food delivery and restaurant discovery platform Zomato has laid off 541 people across customer, merchant, and delivery partner support teams. The Gurugram-based company said that the lay-offs are due to several roles in support teams becoming redundant as, over the past few months, Zomato's Artificial Intelligence (AI)-driven bots and automation have reduced order-related support queries. Here are more details.
According to PTI, Zomato said, "Today, we let go of 541 people, around 10% of Zomato's strength, across these support teams." The company said this has been a "painful decision" and extended 2-4 months severance pay to these employees (based on tenure) along with family health insurance cover till January 2020. Zomato also offered career fair opportunities with companies specializing in the concerned functions.
Citing reasons for the lay-offs, Zomato said, "Over the last few months, we've seen our technology products and platforms evolve and improve significantly. While business has continued to grow consistently, this has led to an overall reduction in direct order-related support queries." It added, "We've dramatically improved the speed of service-resolution, now only 7.5% of our orders need support (down from 15% in March)."
On the other hand, Zomato said that it is currently hiring in its technology, product and data sciences teams. The company said that it has hired over 1,200 people in non-delivery teams and 400 others in off-roll positions.
This year, Zomato said, company lay-offs affected 600 people across customer, merchant, and delivery partner support teams. Last month, Zomato had sacked 60 employees in its customer support department as the staff had turned "redundant" following an improvement in service quality. Zomato's workforce now amounts to an estimated 5,000 people across the organization, including its international markets.
Meanwhile, Zomato has been at odds with the National Restaurant Association of India (NRAI) lately as it plans to introduce its Gold program on deliveries across multiple cities. On August 30, the NRAI said there is an in-principle agreement between the association and the two major online delivery platforms, Zomato and Swiggy, to resolve the issues of the industry including deep discounts.
However, the company is going ahead with its plans to make Zomato Gold available on online deliveries. Earlier, several restaurants in Delhi, Mumbai, and Gurugram had withdrawn from the Zomato Gold program over issues with deep discounting and predatory pricing.