Zomato Fires 100 Employees Due To Rise In Automation; Restaurants Unhappy With Infinite Dining?

India’s 2nd biggest Food ordering and discovery app: Zomato has fired 70 to 100 employees, allegedly due to the rise in automation.

Meanwhile, restaurants are not happy with Zomato’s Infinite Dining program, and soon, they will hold protests against this scheme.

What’s happening with Zomato?

70-100 Zomato Employees Fired

As per news coming in, Zomato has fired as many as 100 employees, mainly due to automation.

70 to 100 employees from the customer care department has been asked to leave, since Zomato has increased automation, and well, humans are no longer required.

This comprises of 1.2% of Zomato’s entire manpower. As per Zomato, less and less customers ordering food now require any help, and this has made customer executives ‘redundant’.

In a statement, Zomato has confirmed the move: “Over the last few months, our service quality has improved, and the percentage of orders requiring support have come down significantly creating a small number of redundancies for 1.2% of our workforce. Most of these redundancies are in the customer support department,”

Right now, Zomato spends Rs 4 to Rs 5 for handling customer care and after-sales service. By removing these employees, Zomato will save money.

Automation Is A Reason For Firing Employees?

As per an insider, Zomato is now increasingly using automation for handling their backend operations, which includes customer service.

Since most of the business operations are being automated, Zomato found it appropriate to fire the ‘redundant’ employees. Since Rs 4 to Rs 5 is being spent on every order on these additional expenses of customer care and customer service, it makes sense to reduce the employees and save the costs.

An unnamed source said, “What’s happening at (Zomato’s) back end is that they are automating a lot of their customer service functions. Customer support is currently a major cost for both Zomato and Swiggy, and due to high volumes of orders spending ?4 to ?5 per order is a significantly high cost (in comparison to other costs)…So this (layoffs) is sort of intelligently scrapping away unnecessary spending on human resource,”

Last month, Shopclues had fired 200 employees, meanwhile, Rivigo had fired 80 staff.

Infinite Dining Irks Restaurants

Infinite Dining, which is a new program from Zomato is making restaurant owners unhappy.

Launched in July this year, Infinite Dining allows Zomato members to pre-book a table in a restaurant, pay a fixed price, and eat unlimited food.

This is proving to be very expensive for the restaurants, as people are misusing the features, and wastage of food is increasing.

Association of restaurant owners are planning to oppose some features of Zomato Gold, Zomato’s loyalty program, and Infinite Dining programs.

Rahul Singh, CEO of Beer Cafe and President of the National Restaurant Association of India (NRAI) said, “In the battle for domination among aggregators, consumers have turned into bargain seekers and restaurants are facing the brunt.”

Various associations of restaurant owners will soon meet Zomato management, and ask them to shut down these loss-making programs.

Another unnamed restaurant owner, and member of an influential association said, “The reason restaurants signed up for Gold was because it nudges people to eat out, but it has just attracted bargain hunters.”

In their defense, Zomato has said Infinite Dining is a new product, and they are ready to listen to the complaints.

Gaurav Gupta, COO, Zomato said, “Just like any product, there are segments for which the product works well and there are some where it doesn’t… Infinity Dining is a new product, and we are going to work through all teething issues,”

Restaurant associations are also contacting Department for Promotion of Industry and Internal Trade (DPIIT), seeking ways to balance growth and income, in the times of food delivery apps.