Zomato lays off 600 employees amid rising automation and slowing growth

Zomato has decided to lay off 600 customer support employees just a year after hiring them.

The decision comes as the company faces slowing growth in its core food delivery business and relies more on automation to reduce costs. Zomato, which provides food and grocery delivery services, has also been dealing with rising losses in its quick commerce arm, Blinkit.

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As part of the Zomato Associate Accelerator Program (ZAAP), the company had recruited around 1,500 customer support staff with the goal of promoting them to roles in sales, operations, and supply chains within a year. However, many of these employees did not have their contracts renewed. Those affected were offered a month’s salary as compensation but were let go without prior notice.

Most employees under the ZAAP program were dismissed without a clear explanation. Many believe that Zomato’s growing use of AI-driven automation in customer support has made their roles obsolete.

Recently, Zomato launched Nugget, an AI-powered customer support platform that now manages millions of interactions each month for Zomato, Blinkit, and Hyperpure. While automation is improving efficiency, the company is also facing setbacks, including weaker food delivery growth and increased losses.

Zomato has also seen leadership departures, adding to its instability. Over the past year, key executives such as Co-founder and Chief People Officer Akriti Chopra have left the company.

In Q3 FY25, Zomato reported a 57% year-on-year drop in net profit, despite a  64% YoY increase in revenue, reaching Rs 5,404 crore during the quarter.