ET Rise
Stock Analysis, IPO, Mutual Funds, Bonds & More

Zomato lays off 540 employees from its customer support team

Zomato said these jobs will be automated and those laid off will get severance of two to four months.

ET Bureau|
Updated: Sep 07, 2019, 06.10 PM IST
Zomato insisted that this was not a sign that the company was cutting costs.
Zomato has laid off 540 employees from its customer support team, comprising 10% of its overall workforce, the company said in a statement Saturday. This is the second round of layoffs in a month at the food delivery and restaurant discovery platform, after 60 people were let go in August.

Zomato said these jobs will be automated and those laid off will get severance of two to four months.

“Over the last few months, we have seen our technology products and platforms evolve and improve significantly. We have dramatically improved the speed of service resolution, such that now only 7.5% of our orders need support (down from 15% in March),” the company said in a statement. Zomato said that it would organise a job fair to help those laid off find employment and would extend insurance support until January 2020.

The online food-delivery firm insisted that this was not a sign of it cutting costs. “This year we have hired around 1,200 people across functions (not inclusive of our last-mile delivery fleet) and another 400 off-rolls positions. We are currently hiring in our technology, product and data sciences teams,” the statement said. The customer support team now has about 400 people left.

The job cuts come on the back of Zomato being locked in a stalemate with the National Restaurants Association of India (NRAI) over its contentious membership programme, Gold. The restaurants have asked Zomato to dilute its programme, which gave customers one dish or drink free, saying deep discounting was hurting their business. These restaurants have been resisting the programme by logging out of it. Of the 6,000 restaurants that originally signed up with Zomato, over 33% have joined the NRAI’s #logout campaign. This fracas has now led to restaurants asking Zomato and its rival Swiggy to decrease the commissions they charge on food deliver and the NRAI has given both the companies until the second week of September to come back with proposals to help ease tensions between them.

ET reported earlier that Zomato has been in the market to raise a $500 million round and it’s existing investor Ant Financial, an affiliate of Chinese internet giant Alibaba, may not lead the round. Ant Financial led the last two investment rounds in Zomato. It took a 14.7% stake in February last year for a primary infusion of Rs 970 crore. This was increased to 23% in November 2018 when it led a follow-on round, regulatory filings show. InfoEdge continues to be Zomato’s largest investor with a 33% stake.

Also Read

Zomato acquires Uber Eats in an all-stock transaction

Akriti Chopra is Zomato Finance Head

Zomato frontrunner to acquire UberEats

Zomato-Uber Eats deal to up appetite of global investors

We are long-term, patient capital; in no hurry to exit Zomato: Sanjeev Bikhchandani

Add Your Comments
Commenting feature is disabled in your country/region.

Other useful Links

Copyright © 2020 Bennett, Coleman & Co. Ltd. All rights reserved. For reprint rights: Times Syndication Service