News: Zomato lays off 540 employees: Tech advances lead to redundancies


Zomato lays off 540 employees: Tech advances lead to redundancies

The company has extended two to four months of severance pay to these laid off employees.
Zomato lays off 540 employees: Tech advances lead to redundancies

The food tech unicorn has laid off 540 employees at the head office in Gurugram across its customer, merchant and delivery partner support teams. 

The job cuts became necessary as tech adoption made a few roles redundant. In the last few months, improvement in its technology interface across functions led to a reduction in support-related queries, making several roles redundant, and prompting the company to layoff employees.

Over the last few months, we have seen our technology products and platforms evolve and improve significantly. While the business has continued to grow consistently, this has led to an overall reduction in direct order-related support queries" said the company in an announcement it made over the weekend. 

While this is the first time Zomato has laid off so many employees, it had done a similar drill last month, where 60 employees in its customer support department were asked to leave. Hence, in to months, Zomato has laid off about 600 employees from its customer support department. 

After the job cuts, the company's employee strength is an estimated 5,000 people across the organization. 

Automation and tech adoption have always been a threat to jobs. As most organizations look to automate their operational functions, the roles in back end support and other similar areas are more vulnerable than other roles in a company. However, with more tech adoption, new roles might also emerge and a different set of skills shall be created as the nature of work changes. 

For the workforce, to safeguard itself from such layoffs or to prepare a new path after their job loss, it is important they invest in their own continuous learning. 

A report, highlighted that 75 million and 375 million people around the world may need to change occupational categories and acquire new skills by the year 2030. 

Even in Zomato, while on one hand, 540 employees have been laid off from back end support teams, hiring in their technology, product and data sciences teams continues.

As tech adoption across the globe increases, more jobs in these areas will be created and such skills will be in demand. 

With the pace at which the food delivery market is growing and transforming, the demand for skills is expected to change at a higher rate. Ordering apps like Swiggy, Foodpanda, Zomato and UberEats have been gaining popularity among customers. In fact, Zomato claims to fulfil 40 million monthly orders in India currently. 

The layoffs in Zomato also come in when, it along with Swiggy has been struggling to negotiate fair and better terms and conditions with restaurant partners. National Restaurant Association of India (NRAI) wrote to large food aggregators last month alleging unfair and anti-competitive practices followed by such companies, which they claim were hurting business for eateries.

The restaurant aggregator and food delivery startups, look into some of the demands made by restaurants, while they continue to focus on improving their services as well. 

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Topics: Technology, #Layoffs

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