Zomato fires 540 employees across customer support

In one of the largest lay offs in the Indian startup ecosystem, foodtech major Zomato has given pink slips to more than 540 employees across customer support teams.

Only last month, the Gurugram-based firm had sacked around 70 employees on the pretext of operational efficiency.

The lay off comprises of 10% of overall employees strength at Zomato. To compensate, Zomato has extended 2-4 months of severance pay to those employees. Severance pay refers to an amount paid to an employee on the early termination of a contract.

Moreover, Zomato would organise a job fair to help those laid off find employment and would extend insurance support until January 2020.

The firm cites redundancies across its customer, merchant and delivery partner support team, for the mass firing. In the past six months, Zomato claims to have improved it's order-related service and reduced support queries to 7.5% from 15% in March.

Unlike previous layoffs, this is not an effort to cut cost, and Zomato clarified that it's hiring people for other positions. "This year we have hired over 1,200 people in our non-delivery teams and another 400 off-rolls positions", said Zomato in a media statement.

The development comes on the heels of Zomato's emphasis on the earning of its delivery partners. According to the company's CEO, Deepinder Goyal, it has disbursed around Rs 216 crore to its fleet of more than 2.3 lakh delivery riders throughout the country.

It indicates a majority of delivery partners who works 8 hours a day, 5 days a week take home around Rs 20,000 every month. For the uninitiated, Zomato employs over 4 lakh riders on the platform.

The Alibaba-backed firm does around 40 million deliveries a month across 500 cities in India, behind its peer Swiggy, which processes about 50-55 million orders every month.

While Zomato claims to back its employees with facilities like incentives, severance pay, and universal paid leave might attract them to work for the Unicorn, the mass layoffs over the pretext of improving technology may receive flak in a job-scarce country.

The development was reported by Mint.