Zomato Lays Off 300 Employees; Shuts Down Cashless Business

Zomato has laid off 300 employees (mostly in US) and content team has been impacted the most- largely because the US is a much more matured market and Zomato’s offline content collection process didn’t work there.

Zomato Post Restructuring : Full Stack and Enterprise

Zomato is reoorganizing itself around 2 focus areas : Full Stack and Enterprise.

From Zomato’s blogpost.

Full Stack are the four regions where all of the following hold true: a) large markets b) growing very fast c) Zomato is the strongest player in its space.

  • These four regions are India, the Middle East, South East Asia (the Philippines and Indonesia), and ANZ (Australia and New Zealand).
  • We will be selling our full suite of products in these four regions, since we have very high levels of traffic here.

Enterprise regions are the ones where any of the following is true: a) relatively small markets b) slow growth economies c) Zomato is not the dominant player. All the remaining markets belong to this category.

  • In these regions, we will not look at ad sales. We will focus mostly on transaction businesses, with a lion’s share of our effort going into selling Book – our table reservations engine.
  • We will focus less on on-the-ground community building and marketing activities. Most of the people in our teams in these regions should be sales people, to help us put Zomato Book in as many restaurants as possible. This means that in these regions, our operations will need fewer people to run the show compared to the past.

Zomato Shuts Down Cashless Business

8 months back, Zomato launched Cashless business in Dubai to enable seamless in-app payments at restaurants.

From Zomato’s blogpost :

Here are some reasons the business didn’t take off, and our most important learnings for the future:

  • Using Cashless wasn’t a part of the natural user flow for a typical Zomato user.We had to lure the user to think differently – this was the most difficult part. In our Cashless product, we needed a user to think about the payment at a restaurantbefore the start of the meal, whereas they are accustomed to thinking about the payment only at the end of the meal.
  • We think most of our users were the avid early adopters of technology products. These users loved Cashless, but this product was turning out to be very hard to scale beyond that. When it comes to deciding the success or failure of our products, we need to always look beyond the early adopters.
  • The cost of educating restaurant staff on Cashless was too high, and takes continuous maintenance. To begin with, we were bearing the cost of the iPad at these restaurants. That cost alone (in hindsight) makes the business look unviable. Over and above that, the continuous training required for the workforce at restaurants (which sees high attrition in itself), sends the costs associated with running this business through the roof.
  • Summing it all up – customer acquisition cost was high. We all know that Cashless was a great user experience, and everyone who used it was delighted with the product and the convenience of not waiting around for the bill.

The Way Ahead

Zomato won’t give up on Cashless. The company will bring it back to Dubai, and to more markets, once the ecosystem is in place.

We will do this with Base and Book – our Point-of-Sale and Table Management systems. To make Cashless work, we will ensure that our table reservation system gets into as many restaurants as possible

Recently, Helpchat too laid off 150 employees.

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