In a significant move reflecting the changing landscape of the food delivery industry, Zomato has laid off approximately 600 customer support employees as part of its transition to automation. This decision follows the launch of Nugget, an AI-powered customer support platform designed to streamline operations and enhance efficiency.
The layoffs primarily affected employees hired under Zomato’s Zomato Associate Accelerator Program (ZAAP), which was initiated last year to provide training and opportunities for customer support roles. Reports indicate that many of these employees were let go without prior notice, receiving only a month’s salary as compensation. The layoffs predominantly occurred in Zomato’s offices located in Gurugram and Hyderabad.
Former employees expressed their shock and confusion over the abrupt terminations. One employee stated, “The firing was unexpected. The treatment we underwent was unfair. I still do not clearly know why I was fired but it’s tough to process.” Many attributed their layoffs to poor performance metrics driven by the company’s new AI systems.
Nugget, Zomato’s newly developed AI platform, has been a game changer for the company. Capable of handling over 15 million interactions monthly, Nugget resolves up to 80% of customer queries without human intervention. This automation has significantly reduced the need for a large customer support team, prompting the company to reassess its workforce requirements.
Deepinder Goyal, Zomato’s co-founder and CEO, described Nugget as a “no-code customer support platform” that allows for seamless automation without requiring extensive developer resources. He emphasized that this technology is crucial for scaling support efficiently and reducing operational costs.
The decision to cut jobs comes amid a slowdown in Zomato’s core food delivery business and rising losses in its quick commerce subsidiary, Blinkit. As the company grapples with these challenges, it has opted to streamline operations through automation rather than maintain a large workforce.
Zomato had initially hired around 1,500 employees under the ZAAP program with hopes of transitioning them into various roles within the organization. However, many of these contracts were not renewed as Zomato shifted focus towards automation and efficiency.
Current and former employees have raised concerns about the criteria used for performance evaluations, particularly regarding the use of AI-generated “karma scores.” These scores reportedly categorize employees into labels such as “Gold” or “Iron,” with low ratings leading to immediate termination without clear justification.
The layoffs have sparked discussions about job security in an increasingly automated environment. Employees are left questioning how performance metrics are determined and whether they are fairly evaluated in light of the new technology.
Zomato’s recent layoffs highlight the broader trend of companies leveraging AI to enhance operational efficiency at the expense of human jobs. As the food delivery giant embraces automation through its Nugget platform, it faces scrutiny over its treatment of employees and the implications of such drastic workforce reductions. With ongoing challenges in its core business, Zomato’s future strategy will be closely watched by industry observers and consumers alike.
Key Highlights:
- Zomato lays off approximately 600 customer support employees amid a shift towards automation.
- The layoffs primarily affect those hired under the Zomato Associate Accelerator Program (ZAAP).
- Nugget, an AI-powered platform, handles 80% of customer queries autonomously.
- Employees express concerns over performance evaluation criteria linked to AI-generated metrics.