Internal Crisis Claims Shake Zomato, CEO Deepinder Goyal Rubbishes Allegations

A post on Reddit from an anonymous source who claims to be an employee of Zomato, has stirred up quite a bit of controversy. It alleges that Zomato is in crisis and that the popular food delivery platform is steadily losing ground to competitors like Zepto Cafe and Swiggy. The post also mentions an internal edict that supposedly requires Zomato employees to place at least seven orders a month from Zomato and that there are apparently systems in place to monitor and enforce this directive. The post added that Zomato employees are discouraged from ordering from rival platforms, especially if they happen to be within the Zomato office. Alongside all this, the post paints a picture of a toxic work culture at Zomato, one in which leadership seems to come and go suddenly and one in which both employees and partners (restaurants) seem to be rather dissatisfied.

CEO Deepinder Goyal Dismisses Allegations

Zomato's CEO Deepinder Goyal very promptly pushed back against the viral post, calling it complete nonsense. On the social media platform X, Goyal countered that Zomato does not require its employees to order food from the company and certainly allows them the freedom to make such decisions, or not, as they please.

“All of this is utter nonsense,” Goyal said on X. “Neither are we losing market share, nor will we ever force our employees to order on Zomato. Freedom of choice is something we stand for vehemently.”

Signs of Pressure Amidst Slowing Growth

Although Zomato's leadership denies that an internal crisis exists, the company is confronting external difficulties. Its most recent financial results showed lackluster growth in the December quarter, which is usually a peak season for the industry. Zomato's Gross Order Value (GOV) increased only 2% sequentially to INR 9,913 crore, even as the year-on-year rise stood at 17%. Despite this, Zomato's main rival, Swiggy, appears to be increasing its market share slightly and now has 43%. All of this suggests that Zomato's growth troubles are real but perhaps not as dire as the whistleblower alleges.

Contentious as they may be, Goyal's assurances firmly establish Zomato's objective of keeping operational stability and trust with its various stakeholders. The company appears to be keeping a strong focus on maintaining even its operational objectives, appearing clear to avoid cutting deep into the employee base. Zomato will need to keep holding all those necessary stakeholder relationships for them to be able to pivot into the even more important growth and profitability phase that they have been missing since they listed.