Zomato Under Fire After Implementing Mass Layoff Without Prior Notice

A former Zomato employee claims in a widely shared Reddit post that the firm unexpectedly and without warning fired over 300 employees, sparking uproar. According to the former worker, who says he was one of those affected, the decision was made based on an "average lateness" of only 28 minutes over three months—and this after he had demonstrated good performance and a solid track record. The post claims that Zomato failed to notify the staff of this significant change or provide them with an opportunity to address or resolve their attendance problems. They were astonished when they were unceremoniously terminated instead. The user blasted the corporation for treating employees like "disposable" and called this "a cold termination."

A Post on Reddit Quickly Gained Popularity

Outrage over job security and business ethics in India's startup sector was sparked by the post, which soon gained popularity. Similar tales were recounted by numerous Reddit users, who questioned the justice of such sudden dismissals. One poster, who claimed to be a current Zomato employee, detailed how quickly the terminations occurred, including how Slack accounts were disabled, access was refused, and staff members were let go without being given a chance to explain themselves. A lawyer encouraged impacted employees to take action and not take this lying down while offering legal support. Employees are being encouraged by users to "fight for the compensation" they are entitled to. Another ex-Zomato employee claimed they were let go for an unclear cause and that they were not informed that differences in login times would be considered non-compliance.

Lack of Job Security in Indian Startup Sector

Despite early indications of a market rebound, the 2024 Indian startup scene was characterised by large personnel cutbacks due to a number of causes. Notably, in order to adapt to the new business reality, some well-known companies were forced to announce significant layoffs, including Ola Electric, Paytm, Byju's, Swiggy, and Flipkart. 11,250 positions were cut in the first half of the year alone, which had a significant effect on the labour dynamics of the industry while being less than in the past. Each company saw a different number of layoffs; for example, Byju's reduced about 500 employees, Flipkart reduced 1,100 to 1,500, Ola Electric reduced 300 to 500, and Ola Cabs reduced 200 roles. Additionally, Paytm Payments Bank reported a notable layoff of about 555 workers, or 20% of its total staff.

The need for profitability, restructuring initiatives, previous overhiring during expansion times, changes in market dynamics, strategic business changes, and regulatory obstacles affecting particular industries were some of the factors that led to this wave of layoffs. Beyond the immediate loss of jobs, these layoffs have an impact on the Indian startup ecosystem's short- and long-term prospects. Innovation may be slowed down in the near future as a result of talent loss and low staff morale. On the other hand, these changes might eventually make Indian startups more competitive and sustainable. How businesses adjust and how the larger ecosystem reacts to these changes will determine the overall impact.