Is Zomato laying off 4% of its workforce to cut costs?

Zomato, the online food-delivery platform is reportedly set to reduce its about 3,800-strong workforce by four per cent. That means, at least a 100 employees across functions will be impacted. This is reported to be part of a cost-cutting exercise.

Given the uncertainties of the environment, the platform is looking at ways to become profitable. Employees across the marketing, technology, product and catalogue functions are being asked to leave.

The platform, however, calls this a normal overhaul or restructuring based on performance that hardly affects three per cent of the workforce, says a Money Control report.

During a recent townhall, Deepinder Goyal, CEO, Zomato is said to have indicated that the functions that were not making profits would be witness to job cuts. Some managers looking after cloud kitchens have already been asked to leave.

In May 2020, when the pandemic happened, about 13 per cent of the staff had been let go, that is, about 520 employees.

This latest round of layoffs is happening soon after three senior executives quit the Company. Amongst those who had left were Mohit Gupta, the co-founder, Rahul Ganjoo, head of new initiatives and Siddharth Jhewar, vice president – global growth and head of Intercity Legends service. Gupta had been heading the food-delivery vertical for over four years and had become co-founder in 2020. Having moved to Zomato in 2018, from MakeMyTrip, where he was COO, Gupta put in his papers on 18 November 2022.

Last year, in September 2021, Gaurav Gupta another co-founder of the Company, quit just two months after Zomato’s initial public offering (IPO).

These exits, especially in the senior ranks have raised questions regarding the steadiness of the leadership at Zomato.

The food-delivery platform posted a net loss of about Rs 250 in the September quarter. During the same period last year, its revenues had been much higher thanks to its food delivery and wholesale units doing well. On 18 November, 2022, shares of Zomato stood at Rs 61.15 per unit post Gupta’s exit.