Online food delivery and restaurant discovery platform Zomato has laid off 540 employees at the company’s head office in Gurugram across its customer, merchant and delivery partner support teams, in what can be seen as the largest round of firing at the food aggregator, which is looking to reduce redundancies in back-end support roles.
“Today, we let go of 541 people (or 10% of Zomato’s strength) across these support teams — based out of our offices in Gurgaon,” the company said in a response to queries from Mint on Saturday.
The company has extended 2-4 months of severance pay to employees laid off over the weekend.
Over the last few months, improvement in its technology interface across functions has led to a reduction in support-related queries; this has led to several roles becoming redundant, prompting the company to layoff employees.
“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).”
This, the company added, has led to certain redundancies across its customer, merchant and delivery partner support teams.
The move follows a round of layoffs the company undertook last month, where 60 employees in its customer support department were asked to go over what it stated was an improvement in service quality that rendered its support staff redundant.
Post layoffs, the company’s employee strength is an estimated 5,000 people across the organisation (including international markets).
In 2019, layoffs at Zomato affected 600 people across customer, merchant and delivery partner support teams, the company spokesperson said.
“This year we have hired over 1,200 people in our non-delivery teams and another 400 off-rolls positions. We have also created jobs for hundreds of thousands of delivery partners. We are still hiring in our technology, product and data sciences teams,” the company added.
Zomato had earlier laid-off close to 300 employees in early 2015, or 10% of its staff, due to cost-cutting.
The food delivery market in India has exploded in the last few years, with ordering apps such as Swiggy, Foodpanda, Zomato and UberEats gaining popularity among customers. However, the burn rate for fulfilling these orders is also very high. Zomato claims to fulfil 40 million monthly orders in India currently.
The aggregators together employ over 4 lakh-plus riders.
However, riders or delivery boys are mostly contract employees, who are not directly employed by companies.
The layoffs come at a time when Zomato, along with Swiggy, are struggling to negotiate fair and better terms and conditions with restaurant partners after the National Restaurant Association of India (NRAI) wrote to large food aggregators last month alleging unfair and anti-competitive practices followed by such companies, which they claim were hurting business for eateries.
Zomato and Swiggy are expected to look into some of the demands made by restaurants after marathon meetings between top executives of companies and the restaurant association.
Zomato was founded in 2008 as a restaurant discovery and review platform. It has expanded to 24 countries and services 10,000 cities globally. In India, it services 500 cities.