Business News

Zomato layoffs: 600 jobs cut as AI takes over customer support

New Delhi: Food tech-giant Zomato has reportedly laid off around 500-600 employees working in the role of customer support. The move came just after a year they were hired by the Gurugram-based firm. The reason behind the layoffs was attributed by the employees’ poor performance.

As many as 1500 employees were hired a year ago as customer support staff under the Zomato Associate Accelerator Program (ZAAP). There was a possibility for these fresh employees to elevate their roles to sales, operations, supply chain, and category items, as per a report by Moneycontrol.com.

But as the employees were about to complete their tenure of one year, many of them couldn’t get a renewal contract from Zomato. Many of the employees were asked to leave without a prior notice, though they got a salary of a month as a compensation. Poor performance and punctuality were the top reasons given to the laid-off employees.

The terminations took place across offices in Gurugram and Hyderabad. This comes in the wake of Zomato launching Nugget, which is an AI-based customer support platform for their businesses across the globe. According to the company, Nugget helps them to automate 15 million support interactions each month for Zomato, Blinkit and Hyperpure. The tool is said to solve 80% problems autonomously with its ability to learn and adapt quickly.

Consequently, the recent layoffs are seen to reduce the operational expenses as the company faces massive losses in business. It also leaves the current employees in a state of uncertainty for job security.

Reports have also suggested that Blinkit, which was acquired by Zomato in August 2022, has been facing heavy losses because of rapid expansion with increase in intense competition in quick commerce domain.

The last major layoffs from the food tech-giant was observed in December 2022 with as many as 100 employees were sacked across product, tech, catalogue, and marketing teams.