Zomato lays off 600 customer support staff as it increases AI use to cut costs: Report

The idea that AI has been replacing these jobs comes from its recent launch of Nugget, an AI-powered customer support platform for businesses worldwide.

Zomato has laid off as many as 600 customer support associates within just a year of hiring them at a time when it has been increasing the use of artificial intelligence (AI) for customer support to cut costs.

The Gurugram-based company had hired as many as 1,500 employees under its Zomato Associate Accelerator Program (ZAAP) a year ago for customer support roles. (Unsplash)

This also comes with the company witnessing slowing growth in its core food delivery vertical (third-quarter profits down 57% year-on-year), as well as mounting losses in its quick commerce arm Blinkit, according to a Moneycontrol report.

The Gurugram-based company had hired as many as 1,500 employees under its Zomato Associate Accelerator Program (ZAAP) a year ago for customer support roles.

It even offered chances for them to get promoted to roles across sales, operations, program management, support, supply chain, and category teams, within just a year.

However, around 600 of these same workers at the company's Gurugram and Hyderabad offices did not get their contracts renewed after their tenures.

The affected workers were offered a month’s salary as compensation and were terminated without notice, citing reasons like poor performance and punctuality, among others, according to the report.

The idea that AI has been replacing these jobs comes from its recent launch of Nugget, an AI-powered customer support platform for businesses worldwide, which is currently powering more than 15 million support interactions per month for Zomato, Blinkit, and Hyperpure, according to the report.

Zomato's previous layoff round was in December 2022, with as many as 100 employees, or roughly four percent of its workforce, sacked across functions like product, tech, catalogue and marketing.

Before this, co-founder and chief people officer Akriti Chopra left the company last year, followed by former CTO Gunjan Patidar in January 2023.