Shock, Confusion And Nugget: The Human Cost Of Zomato's AI Push

A young customer support executive at a Nifty 50 company received a message on Slack towards the end of their shift one afternoon late in March. It was from their human resources manager, asking for a meeting. "I knew immediately that I was the next one to get fired."

A Gurugram-based Zomato employee recalled how shocking their firing was, which came just six months after being onboarded. But there was an added element of confusion for them, since the job originally came with a promise of vertical or horizontal integrations into the firm in a span of 12 months.

"Within a year, you'll have the chance to grow and explore roles across sales, operations, program management, support, supply chain, and category teams, and be the future of Zomato!" reads a hiring pamphlet for the eponymous Zomato Associate Accelerator Program reviewed by NDTV Profit.

But this young employee was not alone. Media reports having been flooding the internet about how Deepinder Goyal's company has been firing customer communications associates even as the firm's AI-powered customer support tool 'Nugget' picks pace.

Over the last year, more than 1,500 people were onboarded through ZAAP. Starting from March, many of them are being fired on flimsy grounds, taking the overall layoff count to around 600 employees, another recently-fired executive told NDTV Profit on the condition of anonymity.

"Following our discussion, it has been decided that it is best we part ways," an HR email sent to the abovementioned employees read. The email promised salaries for the month, and a severance package of one more month's salary. But the email did not mention the reason for the layoffs.

HR executives are having face-to-face interactions with the employees before sending the email, giving reasons like logging in late for work, not gelling well with managers, and poor work ethics for being fired, the second person explained.

To put things into perspective, ZAAP is a program under which Zomato mainly hires freshers for customer support roles. This primarily includes talking to people who have issues while ordering food through their app.

"We are judged on the basis of how much refunds we give to customers, and how long we take to resolve customer complaints. Seven minutes is the cutoff," the abovementioned person added, saying that they were let go on the grounds that their complaint resolution time was over eight minutes.

With droves of people being let go, the company is looking for other freshers for the same jobs at reportedly lower salaries. The first employee mentioned in the story told NDTV Profit that while their CTC as a fresher for ZAAP was somewhere around Rs 4 lakh per annum, the company is now seeking replacements at less than Rs 3 lakh a year.

NDTV Profit was not able to confirm the veracity of this claim.

The firing of people whose main job involves talking directly to aggrieved customers comes at a time when Zomato is actively expanding Nugget, and even hiring GenAI, backend and frontend engineers for the same.

Nugget was built three years ago and started being deployed as the internal customer support tool for the Eternal group of companies — Zomato, Blinkit and Hyperpure.

"Nugget now powers over 15 million support interactions/month for Zomato, Blinkit & Hyperpure. We’re now opening it up to businesses worldwide—90% of companies who’ve seen Nugget have signed up," Goyal had written on X in mid-February.

The layoffs started the following month.

A third person NDTV Profit reached out to, still works as a ZAAP employee in Gurugram. The firings, which were happening at a steady pace since March, have suddenly paused now that there's media scrutiny on the issue, this person said. But that has not abated the concerns of the employees who remain.

"I have seen people more talented than me getting fired in the last month. I don't know how long I might last," the person said. They added that all ZAAP associates were coming in to work under a lot of mental and emotional stress.

A human resources executive involved in the layoffs declined to comment on the issue.

In its December quarter earnings, Zomato had said that the company's expansion efforts had elevated its capital expenditures, leading to higher depreciation costs and near-term losses. Employee costs, it said, were also expected to remain high, with the timeline for reducing them to 6-8% of adjusted revenue being extended to fiscal 2027.

The food aggregator's parent had said that it anticipated profitability to improve sharply once it exited the expansion phase, with margins expected to rise to 5% in the coming quarters.

A representative from Zomato said that the company does not immediately have a comment on the issue.