Zomato lets go of 600 customer support employees amid food delivery slowdown, automation push

Zomato lets go of 600 employees from its customer support team as food delivery slows. (Courtesy: Reuters photo)

Zomato has let go of as many as 600 customer support associates within a year of hiring them, people in the know told Moneycontrol. This comes at a time when the food and grocery delivery major has witnessed slowing growth in its core food delivery vertical, and mounting losses in its quick commerce arm Blinkit.

In parallel, the company has been increasingly leveraging artificial intelligence (AI) to automate its customer support functions, in a bid to cut costs.

Zomato did not respond to Moneycontrol’s queries sent on March 26.

The Gurugram-based firm had hired as many as 1,500 employees under its Zomato Associate Accelerator Program (ZAAP) a year ago in customer support roles, offering the chance to be elevated to roles across sales, operations, program management, support, supply chain, and category teams, within a year. However, a bulk of these contractual workers did not get renewals at the end of their tenures.

According to several former and current employees Moneycontrol spoke to, affected workers were offered a month’s salary as compensation and terminated without any notice period, citing reasons such as poor performance, and poor punctuality, among others.

“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. This has taken place across their offices in Gurugram and Hyderabad. The atmosphere has become really tense,” said a current customer support associate that did not want to be identified.

Outlook Business was the first to report the development.

Employees have also alleged that that Zomato’s efforts towards automating its customer support functions have led to redundancies in these roles.

To be sure, Zomato recently also launched Nugget - an AI-powered customer support platform for businesses across the globe. As per the company, Nugget is currently powering over 15 million support interactions per month for Zomato, Blinkit, and Hyperpure.

This comes at a time when Zomato has reported slowing growth in its core food delivery business, amid an ongoing slowdown in consumption. The company has also faced challenges in scaling beyond the top eight cities, Moneycontrol reported earlier.

At the same time, its quick commerce vertical Blinkit has been witnessing increasing losses due to rapid expansion amid rising competition in the rapidly growing quick commerce market.

Zomato's last major round of layoffs came in December 2022, when it had sacked as many as 100 employees, or roughly four percent of its workforce, across functions such as product, tech, catalogue and marketing.

The company has also witnessed a strong of top-level exits over the past few years. Most recently, Zomato co-founder and chief people officer Akriti Chopra put in her papers in September last year.

Before Chopra, former CTO Gunjan Patidar had quit in January 2023 weeks after co-founder Mohit Gupta had quit the company. Around the same time, Zomato's new initiatives head and former food delivery chief Rahul Ganjoo and Siddharth Jhawar, the head of its Intercity Legends service, had also quit.

Zomato reported a 57 percent year-on-year (YoY) decline in quarterly profit after tax (PAT) at Rs 59 crore in the third quarter (Q3) of financial year 2024-25 (FY25), down from Rs 138 crore in the same period a year ago. It had reported a PAT of Rs 176 crore in Q2 FY25.

The firm’s revenue from operations rose 64 percent YoY to Rs 5,404 crore in Q3, up from Rs 3,288 crore a year ago. It had reported a revenue of Rs 4,799 crore in the previous quarter.