Zomato, the prominent food delivery and restaurant discovery platform, has recently laid off approximately 600 employees, constituting about 10% of its workforce. This decision primarily affects teams involved in customer, merchant, and delivery partner support. The company attributes these layoffs to advancements in Artificial Intelligence (AI) and automation technologies, which have streamlined operations and reduced the necessity for human intervention in resolving support queries.
The implementation of AI-driven bots has notably enhanced the efficiency of Zomato’s platform. The company reports that only 7.5% of orders now require support, a significant improvement from 15% in March. This reduction in support queries is a direct result of technological enhancements aimed at improving user experience and operational efficiency.
To assist the affected employees during this transition, Zomato has offered severance packages ranging from two to four months’ pay, depending on tenure. Additionally, the company is providing extended family health insurance coverage until January 2020 and organizing career fairs to facilitate new employment opportunities for those impacted.
Despite these layoffs, Zomato continues to expand in other areas. The company has hired over 1,200 individuals across various functions, excluding its last-mile delivery fleet, and has created more than 400 off-roll positions. Currently, Zomato is actively recruiting for roles in technology, product development, and data sciences, reflecting its commitment to innovation and growth in the digital space.
Furthermore, Zomato plans to extend its Gold programme to multiple cities on its delivery platform. This initiative aligns with the company’s strategy to enhance customer engagement and diversify its service offerings.
These developments occur amidst ongoing discussions between Zomato and the National Restaurant Association of India (NRAI) regarding concerns over deep discounts in the fine-dining sector. Both parties have reached an in-principle agreement to address these issues, aiming to create a more balanced and sustainable ecosystem for restaurants and delivery platforms alike.
Zomato’s recent actions underscore a broader trend in the industry, where companies are increasingly leveraging AI and automation to optimize operations. While these technological advancements offer significant benefits, they also necessitate careful consideration of workforce implications and the importance of supporting employees through transitions.
