Zomato eliminated 600 customer support staff members because the company shifted to AI automation systems while implementing cost reduction strategies. Zomato made these job cuts exactly one year after launching the Zomato Associate Accelerator Program (ZAAP) which recruited 1,500 employees to fill different positions.
The employees working in Gurugram and Hyderabad lost their jobs because their contracts were not renewed and they received immediate termination despite poor performance and attendance issues. The employees received one month of salary as their compensation according to media reports.
Zomato’s core food delivery business experienced reduced growth which resulted in a 57% decrease in third-quarter profits compared to the previous year. Zomato faces increased pressure to reduce costs because its quick-commerce arm Blinkit continues to generate substantial losses.
Zomato introduced Nugget as its AI-powered customer support platform shortly before implementing this move. The system now processes more than 15 million support interactions monthly for Zomato and its subsidiaries Blinkit and Hyperpure thus minimizing the requirement for human operators.
Zomato has performed substantial workforce reductions multiple times in the past. Zomato reduced its workforce by 100 positions during December 2022 throughout product and tech as well as catalogue and marketing departments. The company has experienced significant leadership departures through the exit of Co-founder Akriti Chopra and former CTO Gunjan Patidar.
