Zomato lets go of 600 employees amid slowdown and AI efficiencies

Quick commerce and food delivery giant Zomato has let go of 600 customer support associates over the last year as it achieved operational efficiency with the AI-powered customer support platform Nugget, according to two people familiar with the process.

The development was first reported by Outlook Start-Up and Moneycontrol.

Zomato, soon to be named Eternal, hired about 1,500 employees under its Zomato Associate Accelerator Programme (ZAAP), which primarily hired for customer support roles, along with a chance to transition to other roles.

It did not renew the majority of these contractual workers at the end of their tenure. YourStory has independently verified the claim.

According to a report by Outlook Start-up, Zomato has fired over 500 employees from its Gurugram and Hyderabad offices, with little to no warning. It cited employees claiming the reasons for firing were vague and unfair, including minor attendance issues, relations with their manager and AI-generated performance assessments.

Earlier, in February, Zomato launched its in-house software, AI-powered customer support platform Nugget for businesses. In a post shared on X, Zomato Co-founder and CEO Deepinder Goyal called it an AI native, no-code customer platform that resolves up to 80% of queries autonomously and already powers over 15 million support interactions for Zomato's house of brands.

Last year, Bengaluru-based ecommerce platform Meesho said it had slashed its customer service cost by 75% with the launch of its multilingual, Gen AI-powered voice bot. At the time, it was already handling 60,000 calls every day. The company plans to repurpose its existing fleet of customer service representatives to handle other complex tasks.

These developments come as the food delivery sector sees sluggish growth and slowdown amid muted urban consumption. In its latest earnings call, Zomato saw its profits in the third quarter of fiscal 2025 plunge by over half on a year-on-year basis, amid what it termed a "demand slowdown".

Its quick commerce arm, Blinkit, has gone back to red amid stiff competition and rapid expansion across pincodes and assortment. Zomato has also been focusing on revamping its dine out and stepping out businesses with District after it acquired Paytm's internet ticketing business.