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Zomato laid off 600 employees due to a slowdown in food delivery and rising losses in Blinkit. The company is investing in AI, launching Nugget to handle 15 million interactions monthly.
Zomato has reportedly fired 600 employees
Zomato has reportedly laid off 600 employees amidst a slowdown in its food delivery sector and rising losses in its quick commerce arm, Blinkit, according to MoneyControl. The company is also increasing its investment in Artificial Intelligence (AI) to automate customer support functions to reduce costs.
A year ago, Zomato hired 1,500 employees under its Zomato Associate Accelerator Program (ZAAP) for customer support roles. These employees were promised opportunities in various roles like sales, operations, program management, support, supply chain, and category teams. However, many of these contractual workers did not get their contracts renewed after their tenure. According to former and current employees, those affected were given one month’s salary as compensation and were terminated without notice, citing reasons like poor performance and punctuality, as per MoneyControl report.
Zomato’s push towards automating its customer support has led to redundancies in these roles. The company recently launched Nugget, an AI-powered customer support platform for businesses worldwide. Nugget currently handles over 15 million support interactions per month for Zomato, Blinkit, and Hyperpure.
Challenges And Market Performance
Zomato is facing slowing growth in its core food delivery business due to a consumption slowdown and difficulties in expanding beyond the top eight cities. Meanwhile, Blinkit has been experiencing increasing losses due to rapid expansion and growing competition in the quick commerce market.
Previous Layoffs And Financial Performance
In December 2022, Zomato laid off around 100 employees, approximately 4 percent of its workforce, across product, tech, catalog, and marketing functions. The company reported a 57 percent year-on-year decline in quarterly profit after tax (PAT) to Rs 59 crore in Q3 FY25, down from Rs 138 crore a year ago, and Rs 176 crore in Q2 FY
However, its revenue from operations rose 64 percent year-on-year to Rs 5,404 crore in Q3, up from Rs 3,288 crore a year ago, and Rs 4,799 crore in the previous quarter.