Zomato lays off 60 employees in customer support team 'to cut costs and reduce redundancies'

  • The online food ordering market in India is likely to grow at over 16 percent annually to touch $17.02 billion by 2023

  • The growth in online food ordering market has been attributed to the rising number of women among the working population

  • Bengaluru gets the highest number of online orders as compared to other cities

Food delivery major Zomato has laid-off 60 employees in its customer support team at its office in Gurgaon, a media report said.

According to Mint, Zomato is looking to cut costs and reduce redundancies across its food delivery business. “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 percent of our workforce," Zomato was quoted as saying by the newspaper.

"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 spokesperson said.

In June this year, Zomato successfully tested food delivery via drone technology.

In December last year, Zomato had announced the acquisition of Lucknow-based startup TechEagle Innovations, for an undisclosed amount, to carve a path toward drone-based food delivery in India.

Since ride-hailing majors, Ola and Uber have reduced their focus on food delivery business, the battle for dominance in India’s fast-growing online food delivery market is a two-way affair between Swiggy and Zomato.

In May this year, Ola's parent ANI Technologies Pvt. Ltd suspended Foodpanda's delivery business and terminated the contracts of several food delivery executives. It was reported that Foodpanda would be focusing only on running the cloud kitchen brands instead of a food delivery business.

 Zomato lays off 60 employees in customer support team to cut costs and reduce redundancies

Representational image. News18

The online food ordering market in India is likely to grow at over 16 percent annually to touch $17.02 billion by 2023, according to a study by business consultancy firm Market Research Future. The growth in online food ordering market has been attributed to the rising number of women among the working population in most of the metro cities.

Bengaluru gets the highest number of online orders as compared to other cities with 20 percent of the market share acquired by the southern city, the report said.

It is followed by Mumbai, Pune, Delhi and Hyderabad with a share of 18 percent, 17 percent, 15 percent and 12 percent, respectively, while other cities accounted for 18 percent of the market share.

"The rising number of logistics providers has also enabled food delivery companies to optimise their fleet, thereby reducing delivery time. Online food delivery platforms are focused towards acquisitions and are collaborating with logistics companies to manage delivery operations in the dedicated region," the study had said.

Amazon.com Inc is also planning a foray into the burgeoning online food delivery business in India this year, two sources aware of the development said, in a move that could raise competition in an increasingly crowded market.

The Seattle-based company is working with local partner Catamaran, founded by IT industrialist Narayana Murthy, and has begun hiring staff for the new operation, the sources said, declining to be named because the plans had yet to be made public.

Amazon is aiming to launch the new service delivering from restaurants ahead of India’s month-long festive season, which starts in September, one of the sources said.

India's rising middle class has driven the growth of the online food delivery sector, with research firm RedSeer Consulting saying order numbers rose 176 percent in 2018.

Amazon last month closed its food delivery operations in the United States in the face of stiff competition.

In India, the company’s move into delivery from restaurants and takeaway food outlets will help the US giant to attract customers for its other services, one of the sources said.

Sandip Somany, President, FICCI, recently said India’s employment issue could be tackled with the help of online aggregators and food and taxi services such as Zomato, Swiggy, Uber, Ola, etc. “The government must focus on the new age business and also the start-up domain for the creation of more jobs,” Somany was quoted as saying by Financial Express.

With input from agencies

Updated Date: Aug 09, 2019 11:35:39 IST