SUMMARY
Zomato began laying off employees this week as the loss-making startup is looking at cutting costs and becoming profitable
At least 100 employees have reportedly been impacted, however, Zomato called this a "regular performance-based churn" of under 3% of its total workforce
The development comes at a time when the startup has seen a series of high-profile exits, and its share price has declined sharply in 2022
Amid layoffs by tech companies globally, Indian foodtech giant Zomato is reportedly planning to cut its total workforce by at least 4% in the coming days.
Zomato began laying off employees this week as the loss-making startup is looking to cut costs and becoming profitable, Moneycontrol reported.
At least 100 employees have been already impacted across verticals like product, tech, catalogue and marketing, the report said citing sources. Employees in the supply chain haven’t been impacted, the report said.
Responding to Inc42’s queries on the report, a Zomato spokesperson said, “There has been a regular performance-based churn of under 3% of our workforce; there’s nothing more to it.”
“These roles had become redundant as these employees who were mostly from mid-to-senior roles were working when the product was being revamped. Now that the product work is over, they have been let go,” a source was quoted as saying by the publication.
Another source told the publication that Zomato founder and CEO Deepinder Goyal, in a townhall meeting days ago, hinted at job cuts in functions not performing well. Some account managers dealing with cloud kitchens have been replaced already.
The development comes a day after Zomato cofounder Mohit Gupta’s resignation from the company. Earlier this week, Zomato’s head of new initiatives Rahul Ganjoo put down his papers, while the startup’s vice president of global growth Siddharth Jhawar quit earlier this month.
Meanwhile, Zomato also shut down its food delivery business in the UAE this month, even as it has introduced its Zomato Pay programme in the country.
Amid a funding winter and sharp decline in its share prices in 2022, Zomato is aggressively trying to achieve its profitability targets.
The foodtech unicorn narrowed its year-on-year (YoY) loss to INR 250.8 Cr in Q2 FY23. However, its Blinkit acquisition widened Zomato’s loss by nearly 35% sequentially from INR 186 Cr in Q1 FY23.
In Q2, quick commerce startup Blinkit’s revenue grew 43% sequentially to INR 236 Cr and its adjusted EBITDA loss narrowed over 20% sequentially to INR 259 Cr.
The latest development comes at a time when tech companies across the world are hurt due to the global economic slowdown and fears of an upcoming recession.
Apart from layoffs across Indian startups, which stand at over 15,000 so far in 2022 alone, big tech companies like Meta, Amazon, and Twitter have also started firing thousands of employees globally to cut down expenses.
