Around 300 employees impacted at Zepto amid cost efficiency drive at the quick commerce company

Zepto co-founders Aadit Palicha (L), and Kaivalya Vohra (R)

Around 300 Zepto employees have been removed from the company’s payroll as the quick commerce firm looks to lower costs amid an intensifying competitive landscape, people familiar with the developments told Moneycontrol.

The aim to become more frugal comes days after Zepto raised $450 million in a fresh round valuing the company at $7 billion, 40 percent higher than its $5 billion valuation last year.

How many Zepto employees have been impacted?

“These 300 employees have been removed from Zepto’s payroll and have been placed with third-party service providers who work with Zepto and others,” one of the persons cited above said. This way, Zepto’s fixed costs, on employees, will be lowered on a month-on-month basis but the company will still be able to drive the same productivity.

What is Zepto saying?

Zepto confirmed to Moneycontrol. “We are building a culture of cost excellence regardless of how large our balance sheet is. Over the past 6 months we have periodically built in-house software to automate operational work for cost excellence; most of these tasks are performed by off-roll staff (invoice processing, replenishment, real estate management etc.),” a Zepto spokesperson said.

What departments at Zepto have been impacted?

These were employees across divisions such as operations, tech, category management, finance and others, as per sources.

Are there more Zepto employees who have been impacted?

While these 300 employees moved more recently, since around the beginning of the year, a total of 1,000 employees have been impacted at Zepto, another source told Moneycontrol.

Why were so many employees impacted at Zepto?

“A total of 1,000 Zepto employees have been asked to go since the beginning of the year as the company automated a lot of its workflow,” the person said. “A bulk of these people were from the customer support team which is being automated to a great extent,” the person added.

News website Inc42 was first to report on Zepto's automation push leaving hundreds of employees without a job.

Some of the tech and support staff have been moved to quality assurance and quality check teams as the company looks to retain as many employees as possible.

Is Zepto cutting other costs?

Apart from cost reduction on the employee side, Zepto will look to drive efficiencies across the board.

In an employee town hall on October 17, Aadit Palicha, co-founder and CEO, Zepto told employees the company will “obsess over costs” and Zepto is “going to be very frugal”.

“We’re going to cut our Amazon Web Services Spend (AWS) spends, we’ll also cut all our software spends, build dashboards in-house instead of doing third parties,” Palicha is learnt to have told employees, who spoke to Moneycontrol.

“Apart from these, Zepto is also going to be very tight on hiring. The company is going to try and do double the business with the same headcount. We don’t want to hire more unless very necessary,” Palicha said.

After the efficiencies, Zepto has around 5,700 employees on roll and looks to maintain a similar headcount going forward as well. Zepto essentially wants to treat "every hiring like a privilege now".