Zomato Lays Off 600 Employees Amid AI Push and Slowing Growth
Summary: Zomato has laid off approximately 600 employees, or 10% of its workforce, as part of its increased reliance on AI and automation to streamline operations. The move comes amid a slowdown in growth and rising competition in the quick commerce sector. The company’s net profit dropped 57% in Q3 2024 due to higher expenses and intensified market pressures. While automation has improved efficiency, it has also led to job displacement, raising concerns about workforce reskilling. Experts emphasize the need for companies to balance technological advancements with social responsibility to ensure sustainable growth.
Zomato Lays Off 600 Employees Amid AI Push and Slowing Growth
Table of Contents
In a strategic move reflecting the evolving dynamics of the food delivery industry, Zomato, a leading Indian food delivery platform, has laid off 541 employees, accounting for approximately 10% of its workforce. This decision is primarily attributed to the company’s increased adoption of Artificial Intelligence (AI) and automation technologies, which have streamlined operations and reduced the need for human intervention in certain areas.India Post+7India+7India Business News+7Onmanorama: Kerala News & Videos+1India Business News+1
Embracing Automation: A Double-Edged Sword
Zomato’s integration of AI-driven bots and automated systems has significantly enhanced its platform’s efficiency, particularly in resolving customer queries. The company reported that only 7.5% of its orders now require support, a notable improvement from 15% in March. This technological advancement has led to a decreased demand for roles in customer, merchant, and delivery partner support teams, culminating in the recent layoffs. Onmanorama: Kerala News & Videos+4India Business News+4Zee Business+4India Business News+4India Today+4Onmanorama: Kerala News & Videos+4
Financial Performance Amidst Competitive Pressures
The layoffs coincide with a period of financial challenges for Zomato. In the third quarter ending December 31, 2024, the company experienced a 57% decline in net profit, falling to 590 million rupees ($6.8 million) from 1.38 billion rupees in the same period the previous year. This downturn is largely attributed to intensified competition in the quick commerce sector and increased expenditures related to the expansion of fulfillment centers for its Blinkit platform. Reuters
Industry-Wide Implications and Expert Insights
The broader food delivery industry is witnessing a shift towards automation, with companies leveraging technology to enhance efficiency and reduce operational costs. However, this trend raises concerns about job displacement and the need for workforce reskilling. Industry experts suggest that while automation can drive profitability, companies must balance technological advancements with social responsibility. As noted in a recent Financial Times article, restaurants are increasingly at odds with delivery platforms over new initiatives that may sideline traditional eateries, highlighting the complexities of integrating technology in a sector reliant on human touchpoints. Financial Times
Conclusion
Zomato’s recent layoffs underscore the transformative impact of AI and automation on the food delivery industry. While these technologies offer avenues for enhanced efficiency and competitiveness, they also necessitate careful consideration of their implications on employment and industry relationships. As Zomato and its peers navigate this evolving landscape, striking a balance between innovation and social responsibility will be crucial for sustainable growth.India Today+6Financial Times+6India
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Last Updated on: Wednesday, April 2, 2025 3:58 pm by Sai Jyothi | Published by: Sai Jyothi on Wednesday, April 2, 2025 3:57 pm | News Categories: Business
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