Zomato Fires 600 Employees Without Notice, Workers React

​Zomato reportedly has laid off around 600 customer support associates who have reportedly been working in the last year. Based on the increased use of artificial intelligence (AI) to carry out automated customer service functions and deceleration in the food delivery business and Blinkit, the company is aligning its resources. ​

Background of the Layoffs

Over a year ago, Zomato kickstarted the Zomato Associate Accelerator Program (ZAAP) for taking in around 1,500 employees who were hired in customer support positions. This program offered the potential to advance to sales, operations, program management, support, supply chain, and category teams within a year. Yet, on conclusion of the tenure, most of the contracted workers were not contracted for the next recruitments.

A month’s salary would be paid to affected workers and the company would terminate without giving the people any notice period, former and current employees said. The layoffs by the company were on account of poor performance and poor punctuality. “A significant number of employees hired as part of Zomato’s ZAAP programs have been fired in the last few weeks without any reasons,” said one customer support associate, who works under Zomato, currently. Across their offices in Gurugram and Hyderabad, this has happened. He reported that ‘The atmosphere has really gotten tense.’

Automation and AI Integration

AI has been slowly creeping into Zomato’s operations to increase efficiency and cut cost. An example of this is the recent launch of ‘Nugget’, a three year developed and AI-powered customer support platform. Currently, Nugget is managing more than 15 million support interactions per month across Zomato’s platforms – BlinkIt, Hyperpure as well as Zomato — and is able to resolve 80 percent of the customer queries with little or no human intervention. ​

Financial Performance and Market Dynamics

Zomato is going through a financially challenging phase and layoffs come at such a time. For the financial year 2024-25, in the third quarter, the company posted a 57 percent year-on-year decline in profit after tax (PAT) to Rs 59 crore from Rs 138 crore in the year ago period. Decline is blamed on slower growth in core food delivery business as shipments fall and losses at the quick commerce like Blinkit. 

Employee Reactions and Broader Implications

The manner in which the layoffs have been done has left the affected employees fuming. Many have been disgruntled with this failure to communicate clearly and with this sudden termination without a notice. They spark fears about the future of employment in the riding tech and food delivery industries given the speed of change in those areas and the growing use of automation to make life easier.

Industry analysis believes that while automation has its place in delivering operational efficiencies, businesses need to meld the use of technology with maintaining a positive head count for a positive morale and image. Zomato’s handling of these layoffs may also have papers talking about ethical employment practices in the tech industry.​

Conclusion

Zomato firing close to 600 employees supporting customers underlines how advancements are outpacing our ability to implement them. With the AI driven solutions in emphasis, the emphasis seems to be a strategic move by the company in attempt to boost efficiency amid financial pressures and a changing market landscape. The human cost of such transitions also indicates how necessary companies are to grow to be more transparent and compassionate in the process of implementing major operational changes.