Zomato Fired Nearly 500 Employees after It Introduced AI to Customer Support

Zomato fired nearly 500 employees that were a part of the customer service team after it integrated Artificial Intelligence. The customer service has been entirely transformed, and now chat support will be taking customer queries. The quick ecommerce came to this decision because of rising cost of operations and challenges in finance.

Employees from Hyderabad and Gurugram claimed that the employees were not even informed formally about the layoffs and were forced to resign. Zomato has not yet explained or shared any statement to the public regarding the layoffs. Employees received a message from a senior post, and they logged out of the message platform without sharing compensation for two months without any notice period.

One of the employees who was sacked claimed that “when I was fired, I was asked to leave with a smile so that other employees wouldn’t be disturbed.”As per employees, the reason behind the termination seems quite vague and unfair. Some of the allegations made on the employees were late log in and often poor customer interaction.

Zomato recently started with the AI power bot called Nugget, which is capable of handling and interacting with more than 15 million customers and most popular brands of Zomato, such as Hyperpure and Blinkit. The primary reason to shift to the AI was because of faster ticket resolution and minimal human interaction with the tickets. It is also believed that the Nugget was able to handle most of the tasks and also solved 80 percent of the tickets without the need for human interaction.

Nugget is one of the most sophisticated platforms that aids in assessing the performance of the employees based on which real-time data can be gathered. It is sure to enhance the practicality and the efficiency of the business while constantly saving financial resources for the organization. Customer service agents deal with a large volume of callers and customer complaints, hence, the need for a larger workforce is a sure thing. However, there are challenges in keeping labourers. AI has the potential to handle complex tasks and take much less time to get the work done.

AI has been a crucial part of the workforce, which is surely helping in mitigating human errors and needs as well. However, the challenge remains that technical glitches can often turn down the systems, which will leave the customers stranded. Many businesses across the world are not maintaining a decent level of human involvement for which many employment and jobs are at stake.

Zomato recently witnessed a sharp decline in profits, and around a 53 percent decline was seen in FY 2024-25. Despite layoffs, the business experienced a steady growth of employee heads from 6173 to 8244.