Food delivery company Zomato has begun handing over pink slips to about 3% of its employees across different segments. The development comes close on the heels of several homegrown start-ups resorting to trimming their workforce in order to manage their finances.
The Gurugram-based online food aggregator told Fortune India that there has been a "regular performance-based churn" of under 3% of the company’s workforce. The food ordering firm has a total of 3,800 employees.
This will be the second job cut by the company since 2020. In May 2020, the company had laid off 520 employees, or 13% of its workforce.
This also comes days after three top executives exited the company in a span of two weeks. On November 18, Mohit Gupta, the co-founder of the company, resigned. In a statement, Gupta said, “Over the past few years, I have seen Deepi (co-founder, managing director and chief executive officer Deepinder Goyal) become an even more mature and confident leader who is now completely capable of leading the business into a bright future with all of you by his side. It is with this confidence that I am deciding to move on from Zomato to seek the other unknown adventures that life holds for me. As I look ahead, I am full of excitement for the vision that Zomato, Blinkit, Hyperpure and Feeding India are building towards.”
On November 14, Rahul Ganjoo, the head of new initiatives at the company resigned. Prior to this, Siddharth Jhawar, head of intercity legends, the company’s flagship inter-state delivery service, resigned from Zomato.
Notably, the company also pulled the plug on its delivery business in the U.A.E. with effect from November 24. The company sold its U.A.E. business to Talabat-Delivery Hero in 2019 but has been rendering services from Talabat in return for cost reimbursement. “We would like to update the exchange that the Company will discontinue rendering of services to talabat in the UAE w.e.f. November 24, 2022, and the customers looking to order food through the Zomato app in UAE will be redirected to talabat, as per the terms of the agreement between the parties,” the company said in a statement.
Earlier this month, the company reported a 62.2% year-on-year (YoY) rise in its July-September quarter revenue at ₹1,661 crore against ₹1,024 crore in the same period last year. The food-tech major also narrowed its net loss by 41.6% to ₹251 crore in the July-September quarter as against ₹430 crore in the year-ago period.
On Monday, shares of Zomato slumped as much as 4.24% at ₹64.30. The company became the first startup unicorn to list on the stock exchanges on July 23, 2021.
Over the past few months, several domestic tech start-ups have slashed their workforce. Last month, ed-tech unicorn Byju’s decided to sack as many as 2,500 employees as a cost-cutting measure in order to achieve profitability by 2023. Apart from Byju's, many startups such as Unacademy, Vedantu and Cars24 have also laid off employees amidst the funding crunch.
