Zomato Cuts 500 Jobs From Customer Service Program Amid Expanding AI Automation

Food delivery platform Zomato has trimmed its workforce by around  500 employees from its Zomato Associate Accelerator Program (ZAAP), a customer service training initiative that started last year. The job cuts at Zomato come as the company faces slowing growth in food delivery and transitions toward artificial intelligence (AI)-powered customer support solutions.

'Nugget' AI Customer Support

The job reductions at the food delivery major coincide with the implementation of 'Nugget', an AI customer support system developed internally over a three-year period. 

This AI platform now processes more than 15 million monthly customer interactions across Zomato's various services, including Blinkit and Hyperpure, and can resolve approximately 80 per cent of customer inquiries automatically.

According to information from both current and former Zomato staff members, as quoted by multiple reports, ZAAP employees at facilities in Gurugram and Hyderabad were compelled to resign without any formal announcement of layoffs. 

While ZAAP was originally created to provide new career paths in areas like sales, operations, and program management, many contractual workers found their agreements were not extended, resulting in unexpected terminations.

"A majority of employees hired under Zomato's ZAAP program last year have been let go over the last week or so without any clear explanation," a customer support employee was quoted as saying.

It is being said that the layoffs could be linked to multiple factors: deceleration in Zomato's primary food delivery operations, mounting losses in its Blinkit quick commerce division, and strategic investments in automation technologies designed to reduce operational expenses.