Zepto removes 300 employees from payroll to lower costs; ‘Company going to be very frugal,’ warns Aadit Palicha

Around 300 Zepto employees have been removed from the company payroll to lower costs amid an intensifying competitive landscape, as reported by Moneycontrol.

Zepto removes 300 employees

This comes after Zepto raised $450 million in a fresh round, valuing the company at $7 billion, 40 per cent higher than its $5 billion valuation last year.

“These 300 employees have been removed from Zepto’s payroll and have been placed with third-party service providers who work with Zepto and others,” a source was cited in the MC report.

This is to lower employee costs on a month-on-month basis, without impacting productivity.

“We are building a culture of cost excellence regardless of how large our balance sheet is. Over the past 6 months we have periodically built in-house software to automate operational work for cost excellence; most of these tasks are performed by off-roll staff (invoice processing, replenishment, real estate management etc.),” a Zepto spokesperson told Moneycontrol.

These were employees across operations, tech, category management, finance and other departments.

“A total of 1,000 Zepto employees have been asked to go since the beginning of the year as the company automated a lot of its workflow,” the person said. “A bulk of these people were from the customer support team which is being automated to a great extent,” the person added.

Inc42 was the first to report on Zepto's automation push, leaving hundreds of employees without a job.

In an employee town hall on October 17, Aadit Palicha, co-founder and CEO, Zepto, told employees the company will “obsess over costs” and Zepto is “going to be very frugal”.

“We’re going to cut our Amazon Web Services Spend (AWS) spends, we’ll also cut all our software spends, build dashboards in-house instead of doing third parties,” Palicha is learnt to have told employees, who spoke to Moneycontrol.

“Apart from these, Zepto is also going to be very tight on hiring. The company is going to try and do double the business with the same headcount. We don’t want to hire more unless very necessary,” Palicha said.

Quick commerce firm Zepto competes with Blinkit and Instamart in the fast-growing market of the country. The entry of newer players from big brands like Amazon and Flipkart Minutes has further intensified the competition.

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