Zomato Lays Off 600 Amid Automation & Quick Commerce Battle

The affected employees were hired under the Zomato Associate Accelerator Program (ZAAP) but failed to secure contract renewals.

Zomato has reportedly laid off 600 employees from its customer support division as part of a larger restructuring effort driven by increasing automation and cost-cutting measures. The move highlights the growing impact of AI-driven automation in the food delivery industry and reflects broader trends in tech layoffs in 2025.

Zomato's Shift to AI

The food delivery giant is aggressively integrating AI-powered solutions to streamline customer service operations, reducing its reliance on human intervention. With Zomato Automation playing a key role in optimizing efficiency, the company has been replacing manual customer support tasks with AI chatbots and automated query resolution systems. This transition aims to enhance response times, minimize errors, and lower operational costs.

Zomato Job Cuts

 
The recent job cuts primarily affected employees hired under the Zomato Associate Accelerator Program (ZAAP). Many of these contractual workers failed to secure renewals at the end of their tenure, leading to their termination. The layoffs have raised concerns about job security in the food delivery industry, where rapid technological advancements are reshaping workforce requirements.

Zomato's decision comes amid slowing growth in its core food delivery business and rising competition in the quick commerce sector. Players like Blinkit, Zepto, and Swiggy Instamart are intensifying the battle for market dominance in the ultra-fast grocery delivery space. As Zomato invests heavily in its quick commerce vertical, the company is restructuring its workforce to align with its strategic priorities.

The layoffs coincide with a recent downgrade of Zomato’s stock by BofA Securities, which revised its rating from ‘Buy’ to ‘Neutral’ and lowered the target price from INR 300 to INR 250. Analysts cite increasing competition, operational challenges, and the company’s ongoing restructuring efforts as factors influencing the downgrade.

The Future of Zomato’s Workforce & AI Integration

As automation continues to reshape the food delivery landscape, Zomato is expected to further invest in AI-driven customer engagement, logistics, and service optimization. While this technological shift promises efficiency gains, it also raises concerns about the displacement of human workers.

The broader trend of automation in food delivery suggests that more companies may follow Zomato’s lead, leveraging AI to drive cost efficiencies while navigating an increasingly competitive market. However, balancing automation with workforce retention will remain a critical challenge for the industry moving forward.

Also Read: Foodtech king Zomato to layoff 13% of its workforce