Gurugram-based food discovery and delivery platform Zomato has laid off 60 (about 1%) employees, mostly from its customer support department. According to Zomato, this is part of the redundancies that have evolved as it scales technology.
"Over the last few months, our service quality has improved, and the percentage of orders requiring support has come down significantly creating redundancies for about 1% (60 people) of our workforce. Most of these redundancies are in the customer support department and also include movements to other departments as part of our Internal Job Placement (IJP) exercise,” a company spokesperson told TNM.
Zomato’s IJP program is a lateral movement initiative that lets employees move from one department to another to gain and renew skills at Zomato. The company has absorbed most of them in other departments, while some of them were let go. Those who was laid off, were let go with a severance package as per their contracts.
While several news reports suggest that this is part of Zomato’s cost cutting initiative, the company denies the same. It claims that it wouldn’t have hired over 2000 employees recently from across the country if it were looking to cut costs.
“As we’ve expanded to 500+ cities across India we also expanded our workforce by over 2000+ and this requires constant realignment to new departments and results in some redundancies with the scaling of technology,” the spokesperson said.
Zomato last laid off employees in 2015 when 300 of them were let go, mostly from the US. It also recently sold its UAE delivery business to Delivery Hero for $172 million.
In India, Zomato is locked in a heated battle with Swiggy in the growing food delivery market, which is expected to become a $17 billion opportunity by 2023.
Zomato is currently present in 500 cities and towns and has 1.5 lakh restaurant partners and a delivery fleet of 2.3 lakh partners, while Swiggy is present is over 290 cities with a delivery fleet of 2 lakh partners.