Leading food delivery platform Zomato, the parent company of Zomato and Blinkit, has announced the termination of 240-250 employees in its latest round of workforce reduction, according to sources reported by LiveMint. The layoffs were implemented following a comprehensive review of the company's Customer Delight operating model and organisational requirements. As reported by Mint, the company has also informed employees about the workforce reduction, with the decision affecting approximately 240 colleagues in Hyderabad who will be losing their positions as part of the Customer Delight operations discontinuation. The affected employees work through third-party service providers and are not on Zomato's direct payroll.
According to Mint reports, Zomato is offering comprehensive support to the affected employees, including August salary, four months' pay, including contractual notice pay and a one-time ex gratia payment. The package also includes medical insurance, continued access to counselling support until 31 March 2027, ownership of company-issued laptops and earphones for personal use, and dedicated outplacement assistance to help identify relevant opportunities. This represents an improvement from the previous severance package of severance equivalent to four months offered during the last restructuring. The source emphasized that this decision comes amid significant changes to Zomato's customer support model over the past six years, with the company wanting to operate as one integrated team in Gurugram closer to product, technology and analytics functions.
The current Hyderabad closure represents a continuation of Zomato's broader shift toward AI automation and outsourcing, rather than a standalone event. As reported by The Economic Times, within about a month of Nugget's launch, Zomato had already let go of close to 500 to 600 customer support executives hired under its Zomato Associate Accelerator Program (ZAAP), with cuts falling across Gurugram and Hyderabad offices. Employees at the time described being logged out of company systems without warning and told over Slack that they'd been marked "faulty" based on internal data, with some let go despite having no prior write-ups. The compensation offered was typically a month or two of salary, with no formal notice period. Nugget was announced in February 2025 by Zomato co-founder and CEO Deepinder Goyal, who described it as an AI-native, no-code customer support platform built to let businesses scale support without hiring large developer or agent teams. The platform has now handled more than 2.2 billion conversations with 85% automation coverage across teams, built more than 2,000 applications, and maintains a 99.9% uptime SLA based on an 18-month rolling average, according to figures on Nugget's website.
According to company data, Nugget has delivered significant cost savings for Zomato, helping reduce customer support costs by 55% while handling significantly more than 15 million conversations per month. The platform has brought annual costs down from approximately $20 million to $9 million, demonstrating the effectiveness of AI automation in customer support operations. As part of the restructuring, Zomato is consolidating its in-house customer support operations in Gurugram, reflecting the company's strategy to centralize support functions closer to its core operations. This consolidation follows the pattern established in April last year when Zomato fired nearly 600 customer support executives over a period of one year under its ZAAP, with the layoffs happening within a month after the company launched Nugget.
Zomato's layoffs are part of a broader series of workforce reductions announced by companies this year, highlighting the challenging employment landscape in the technology sector. In February, interior design company Livspace said it had laid off 1,000 employees as part of an "internal reorganisation" linked to its adoption of artificial intelligence. Flipkart, owned by US-based Walmart, also reportedly dismissed around 400 employees in March over performance-related issues. The move came months after Amazon cut 800 jobs in India as part of a global restructuring that affected 16,000 employees. Paytm announced in June that it would lay off around 400 employees, the cuts amounting to roughly 1% of the company's workforce. For Zomato employees in Hyderabad, the latest restructuring could mark another significant shift in the company's customer support operations, with hundreds potentially facing an uncertain job market.
