Online food aggregator and delivery platform Zomato announced on Saturday that it laid off 541 people, which was 10% of the company’s strength, across customer, merchant and delivery partner support teams.
Zomato said that this led to redundancies, which is why they were laying off the 541 people. The company said that it would be providing between 2-4 months severance pay (based on tenure), family health insurance cover till the end of Jan 2020 and career fair opportunities with companies.
It further added the cause for the layoffs was technological advances, and they had nearly 1,200 people apart from their delivery fleet and another 400 people off-rolls.
The company said that their business has continued to grow, and their order-related queries has gone down as their technology products have improved. “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),” a company spokesperson said.
The company is currently at loggerheads with the National Restaurant Association of India (NRAI) over deep discounts. Several restaurants chose to log from from food aggregator apps such as Zomato, Dineout and Magicpin, but the biggest grouse continued to be with Zomato’s Gold programme. Zomato had earlier announced a reconstruction of its 'Gold' service to help drive better margins for the restaurants, which did not go well with the NRAI.
The NRAI said on August 30 that there is an in-principle agreement between the association and the two major online delivery platforms, Zomato and Swiggy, to resolve the issues of the industry including deep discounts.
However, Zomato is planning to introduce its Gold programme across multiple cities on delivery as well.