Zomato, a well-known food delivery platform, recently laid off over 600 customer support employees, within a year after hiring them. This move comes as the company faces slower growth of food delivery and financial losses in its quick commerce unit, Blinkit. To cut costs, Zomato has been increasingly relying on artificial intelligence (AI) to handle customer support tasks.
The layoffs happened shortly after Zomato launched ‘Nugget,’ an in-house AI-powered customer support system that took three years to develop. Nugget now manages over 15 million customer interactions every month across Zomato, Blinkit, and Hyperpure. It is also capable of resolving up to 80% of customer queries without human involvement.
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Employees Hired Under ZAAP Program Affected
According to MoneyControl, Zomato had hired about 1,500 people last year under its Zomato Associate Accelerator Program (ZAAP) to handle customer support. This program was meant to provide opportunities for employees to transition into other roles like sales, operations, program management, support, supply chain, and category teams within a year.
However, many of these contractual workers did not have their contracts renewed. According to reports, employees at Zomato’s Gurugram and Hyderabad locations were asked to resign without receiving an official layoff announcement. Some employees claimed they were fired without notice and only received a month’s salary as compensation. The company claimed poor performance and punctuality as reasons for dismissal.
A current customer support associate, who spoke to MoneyControl anonymously, shared: “Most employees hired under the ZAAP program last year have been let go recently without any clear reason. It’s happening across the Gurugram and Hyderabad offices, and the work environment has become very tense.”
Employees also believe that Zomato’s increasing use of AI to handle customer queries has made many support roles redundant.
Before this, Zomato’s last major round of layoffs happened in December 2022, when around 100 employees about 4% of its workforce were let go from departments like product, tech, catalogue, and marketing.
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