Zomato fires 540 employees; says automation made several roles 'redundant'

In one of its largest firing rounds, Zomato, the online food delivery and restaurant discovery platform, has laid off 540 employees at its Gurugram office -- about 10 per cent of the overall strength at its head office in India. The company has fired employees from its teams across customer, delivery and merchant support segments. The company had also fired 60 employees from its customer support team in August.

The development comes close on the heels of food delivery platforms, including Zomato and Swiggy, being accused of unfair and anti-competitive practices by thousands of restaurant partners. The food delivery company has given two-four months of severance package to the employees who have been sacked, Mint reported. The daily also quoted a statement from the start-up, saying a significant improvement in tech interface had led to a decline in support related complaints, making several roles redundant.

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"Over the last few months, we have seen our technology products and platforms evolve and improve significantly. While the business has continued to grow consistently, this has led to an overall reduction in direct order-related support queries. We have dramatically improved the speed of service resolution, now only 7.5% of our orders need support (down from 15% in March)," Zomato said, reported the daily. After the current round of layoffs,  Zomato's total employee strength stands at 5,000. Apart from layoffs across customer, delivery and merchant support segments, Zomato also hired around 1,600 employees in 2019, including 400 off-roll people, said the company.

Food delivery companies, particularly Zomato, are at loggerheads with restaurant partners over aggressive discounting and predatory pricing. The issue had recently led to hundreds of restaurants in Delhi, Mumbai and Gurugram pulling out of the popular Zomato Gold programme amid growing unrest between the restaurant industry and online ordering platforms.

Zomato Gold, which offers complimentary food and drinks to diners, has 1 million subscribers and around 6,500 restaurant partners.  After several rounds of meetings with restaurant owners, Zomato had come up with a modified Gold programme in August. However, post the 'logout movement', Zomato asked them to serve a 45-day notice period before logging out, but it's not clear how many of them are listening.

Edited by Manoj Sharma

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