Under Zomato’s Associate Accelerator Program (ZAAP),their customer training initiative, the company has laid off around 500 employees. Amid the rapid shift towards quick-commerce, this decision came as an attempt to automate customer service by integrating artificial intelligence.
Employees from ZAAP Gurugram and Hyderabad, as per Outlook, were forced to resign without any formal layoff announcement. While there has been no official comment from Zomato, an employee explained that they received a message from the senior manager that they have been “identified as faulty based on data.” Following which they were logged out from the messenger and offered two months salary as compensation without a notice period.
Former mention that, “When I was fired, I was asked to leave with a smile so that other employees wouldn’t be disturbed”. The reasons stated for the sudden termination were vague and unfair. Sacked for coming late by a few minutes on a particular day, they were also criticised for their customer interaction.
The layoffs come at a strategic time after Zomato’s “Nugget” finally launched after three years of development. “Nugget” is an AI-powered customer support platform which handles over 15 million monthly interactions across Zomato’s brands including, Blinkit and Hyperpure. It has been made specifically to monopolise on the time saved during ticket resolution of a customer. Nugget has efficiently managed 80% of enquires without human interaction.
Nugget’s AI driven performance assessment allegedly assigns “karma” scores like Gold or Iron played a role in dismissal decisions.The use of AI to evaluate employee performance raises concerns about fairness and accuracy. While designed to enhance efficiency, its inability to understand context may lead to unintended consequences. As companies integrate AI into customer service, balancing automation with human oversight remains crucial to ensuring fair evaluations and job security.
At the end of FY24, Zomato’s headcount grew by 34% to 8,244 employees, up from 6,173 in FY23, according to the company’s annual report. The company reported a consolidated net profit of Rs 59 crore for Q3 FY25, marking a 57% decline from the Rs 138 crore profit recorded in the same quarter of the previous year. However, its revenue from operations showed significant year-over-year growth, increasing to Rs 5,405 crore from Rs 3,288 crore.