Exclusive: Hundreds Lose Jobs Amid Zepto’s Automation Push

SUMMARY

Zepto is on an aggressive automation push, which has resulted in hundreds of employees losing their jobs over the past six months

Over 500 employees, including on-roll and off-roll, have lost their jobs since Zepto began restructuring in April this year

Zepto confirmed the development but said that the automation push mostly impacted off-roll staff

Quick commerce unicorn Zepto is on an aggressive automation push which has resulted in hundreds of employees losing their jobs over the past six months.

Over the past month, around 200 employees were laid off as part of the restructuring exercise, with most of those affected being off-roll employees, sources told Inc42.

Those involved in ground operations, customer support, invoice payments, replenishment operations, Zepto Cafe, and the expansion team were hit by the restructuring exercise.

The sources added that over 500 employees have lost their jobs since Zepto began restructuring in April this year.

Zepto, in a written statement, confirmed the development to Inc42. “We are building a culture of cost excellence regardless of how large our balance sheet is. Over the past 6 months we have periodically built in-house software to automate operational work for cost excellence; most of these tasks are performed by off-roll staff (invoice processing, replenishment, real estate management etc.),” a Zepto spokesperson said.

However, one of the sources told Inc42 that the restructuring exercise also impacted some on-roll employees. “They have put their expansion plans on hold and are trying to fix their balance sheet,” the source said.

The development comes at a time when Zepto has been showing signs of slowing down. Earlier this year, its food delivery vertical, Zepto Cafe, shut 45-50 outlets citing sourcing issues and a shortage of trained kitchen staff. Order volumes in the segment have halved from a peak of 1 Lakh daily and marketing efforts have largely disappeared.

However, with the startup raising $450 Mn in a fresh funding round, led by California Public Employees’ Retirement System (CalPERS), at a valuation of $7 Bn valuation, it remains to be seen if it renews its expansion push to regain market share.

Zepto competes with Blinkit and Instamart in the rapidly growing quick commerce market of the country. The entry of newer players like Amazon and Flipkart Minutes has further intensified the competition.

Announcing the fresh funding yesterday, Zepto cofounder Aadit Palicha said, “We now have approximately $900 Mn of net cash in bank and (are) more than well-capitalised for the future.”