All’s not well at Zomato. Weeks after the company had announced that it was laying off 10% of its workforce in an apparent restructuring, it has emerged that for the first time in 5 years, the company is falling short of its sales targets. And Deepinder Goyal, the 32 year CEO, is not pleased.
Goyal has sent out a scathing email to Zomato’s employees, asking them to work harder to ensure that the company doesn’t disappoint its investors. Goyal claims that the company’s sales team quadrupled in 2015 alone, but revenue didn’t keep pace with this growth. In a sign that the restaurant listing business might be losing its sheen, Goyal claims that in 2013, the Delhi office earned enough revenue to pay the salaries of the entire Indian team, but no city in any country today could claim to do so. Zomato has also grown rapidly in this period, having expanded to over 20 countries and acquired UrbanSpoon. It recently raised $60mn in the latest round of funding.
Goyal also berates his sales team for “not firing on all cylinders”, and blames motivation and training for their poor performance. He goes on to say that Zomato has consistently met investor expectations throughout its history, but this year, there’s a very real chance they won’t meet their sales targets.
The food tech industry in India is going through troubled times, with Dazo shutting down, Tiny Owl firing 600 employees and SpoonJoy scaling down its operations, and Foodpanda’s troubles. These latest details on Zomato’s numbers suggest that these tough times might be here to stay.