INDIA – Zomato, an Indian multinational restaurant aggregator and food delivery company, has plans to lay off nearly 3% of its staff based on regular performance.
“There has been a regular performance-based churn of under 3 percent of our workforce, there’s nothing more to it,” said a Zomato spokesperson.
Currently, the company has nearly 3,800 employees after the last layoff of about a 520 workforce that made up about 13% of its staff in May 2020, in response to the slump in business following the covid pandemic.
In this challenging macro environment, the food delivery company is looking at cost-cutting measures and reportedly, at least 100 people have already been impacted.
The layoffs come soon after top-level exits from the company in the last few weeks, and the latest resignation in the food-delivery platform is its Co-Founder Mohit Gupta.
In a letter to Zomato, Gupta said he is deciding to move on from Zomato to seek the other unknown adventures that life holds for me.
“Over the past few years, I have seen Deepi (Managing Director and CEO Deepinder Goyal) become an even more mature and confident leader who is now completely capable of leading the business into a bright future with all of you by his side.
It is with this confidence that I am deciding to move on from Zomato to seek the other unknown adventures that life holds for me. As I look ahead, I am full of excitement for the vision that Zomato, Blinkit, Hyperpure, and Feeding India are building towards,” he added.
Gupta, who joined Zomato four-and-a-half-year back, is credited with building Zomato’s food delivery operations from scratch and was elevated to co-founder in 2020 from the position of CEO of its food delivery business.
His resignation follows that of the company’s deputy chief financial officer, Nitin Savara, who stepped down in August.
Zomato said Gupta was not designated as key managerial personnel under the Companies Act, 2013, and the listing regulations while making the voluntary disclosure of his resignation.
Gupta, however, stated that he is still a long-term investor in Zomato and that the journey to build a world-class tech business out of India for India (and possibly the world) is still ongoing, with only 1% completed.
Zomato last week reported a narrow second-quarter loss to ₹251 crores from ₹430 crores a year ago on a sharp rise in its income from food delivery and its wholesale Hyperpure unit.
On the profitability front, contribution margin as a percentage of gross order value improved meaningfully from 2.8% in Q1 FY23 to 4.5% in Q2FY23. As a result, the food delivery adjusted EBITDA hit break-even in Q2FY23.