comscore Zomato sacks about 100 employees in an effort towards cost-cutting
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Zomato sacks 60 employees in an effort towards cost-cutting

Zomato confirmed the move revealing the reason behind it. The company did this to remove the redundancies present in the workforce.

  • Published: August 9, 2019 1:07 PM IST
Zomato

Update: A Zomato spokesperson has issued an official statement regarding the report. The spokesperson revealed that the exact number of employees removed is 60. The statement reads, “Over the last few months, our service quality has improved, and the percentage of orders requiring support has come down significantly creating redundancies for about 1% (60 people) of our workforce. Most of these redundancies are in the customer support department and also include movements to other departments as part of our Internal Job Placement (IJP) exercise. Our IJP program is a key lateral movement initiative that lets employees move from one department to another to gain and renew skills at Zomato. As we’ve expanded to 500+ cities across India we also expanded our workforce by over 2000+ and this requires constant realignment to new departments and results in some redundancies with the scaling of technology.

Zomato, the food delivery, and restaurant discovery service has just sacked about 100 people from its customer support staff. The information comes out from Gurgaon office as the company plans to cut costs and decrease the number of “redundancies”. Zomato confirmed the move revealing the reason behind it. The company did this to remove the redundancies present in the workforce. For the people unaware, redundancies here may refer to additional people meant as a backup or a separate shift. There may also refer to people who are not really critical to the core operation of the department.

The reason behind this move at Zomato

According to a report by Livemint, the company stated, “Over the last few months, our service quality has improved, and the percentage of orders requiring support have come down significantly creating a small number of redundancies for 1.2% of our workforce.” It went on to add, “Most of these redundancies are in the customer support department.” The report revealed that the company spends anywhere between Rs 4 to Rs 5 on each order for customer support. This expense also includes after-sale services for the orders.

The report clarified that Zomato seems to have automated a number of “customer service function” in the back end. Combined with efficiencies in the system, this move will ensure that the company does not spend on “unnecessary spending”. The company currently serves around 40 million orders per month. It also revealed that optimization in the way the business works is likely the only way for Zomato to show growth to its investors.

This is not the first time that Zomato has reduced its workforce. The report revealed that Zomato removed about 300 employees back in 2015. The number of people laid off back then accounted for about 10 percent of its total staff. This round of lay-offs also focused on cost-cutting as the company moved in new areas.

  • Published Date: August 9, 2019 1:07 PM IST