Restaurant discovery platform Zomato, which serves 22 countries around the world and has a $1 billion+ valuation, is restructuring its business with a 10 percent staff layoff and change in data collection methods.
The layoff will cut 300 of its 3,000 employees — many of which are American employees who work for Zomato’s content team and help with data collection for Zomato-listed restaurants by working as Zomato’s “feet on the street,” i.e., visiting restaurants in person, collecting data, taking pictures and updating restaurant profiles on the company’s website.
The change in its live data collection method, which set it apart from other competitors, will likely push its curation methodology towards a Yelp-like style that relies on crowdsourcing for updating restaurant profiles.
The company is also splitting its business markets into two categories, “Full Stack” and “Enterprise,” to refocus its efforts, Zomato CEO Deepinder Goyal said in a blog post.
The Full Stack category consists of regions which are fast-growing, large markets and are Zomato’s forte. The company currently places India, the Middle East, South East Asia (Philippines and Indonesia) and ANZ (Australia and New Zealand) under this category and will now channel more efforts into these markets.
Its Enterprise category consists of slow-growing, smaller markets where Zomato is not a dominant player. In these markets, the company said it will only focus on selling its product, “Book,” its table reservations engine, and will move away from focusing efforts on “on-the-ground community building and marketing activities.”
Zomato’s decision to change its data collection methodology comes in the wake of new data, which suggested that 40 percent of Zomato restaurants account for 92 percent of its Web traffic.
The new changes are likely to hit the American market worst as it accounts for 700,000 of 1.4 million restaurants listed on Zomato, according to TechCrunch.
“The cuts in other countries will be not be a large number given the size of those markets and have already happened or will happen early next week,” a Zomato spokesperson told TechCrunch. “The U.S. will see a higher impact because the number of restaurants there is larger than in other countries.”
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