Amid hundreds of layoffs nationwide, Zomato’s Philly office suddenly shuts down

It happened fast and seemingly out of nowhere.

On Wednesday, they got an email about an office-wide meeting. On Thursday, they all got laid off, all 15 full-time staffers at Zomato’s Philly office on South Broad Street.
Someone from corporate — someone they had never met before — told them the current model just wasn’t scalable. He was flanked by another senior-level Zomato staffer who had come to Philly for the meeting. The company was shutting down most of its U.S. offices, they said, focusing elsewhere.
The Philly team, which had a happy hour planned later that day, signed their separation agreements, returned their MacBook Airs and left. It had been just five months since Zomato launched operations in Philly.
Zomato, a venture-backed restaurant discovery company based in India, laid off 300 employees or just under 10 percent of its global staff last week, TechCrunch reported. The news comes less than a year after Zomato acquired Urbanspoon and aggressively entered the U.S. market, with 200 initial job listings. It may be a cautionary tale about the virtues of slow growth.
Many of the local staffers were “content associates,” collecting information about restaurants around town, former Philly Zomato staffers told us. (In the Philly office, 13 of 15 staffers focused on content, one staffer who asked not to named told us. The Philly office also employed an office manager and a community manager.) That kind of investment no longer made sense in U.S. markets that were flooded with competitors like GrubHub and Yelp, according to an internal memo obtained by TechCrunch. Instead, Zomato would only invest that kind of manpower in markets where they had no competition, like India, the Philippines and Australia.
Attempts to reach Zomato were unsuccessful. The several times we called the company’s U.S. headquarters, we got a busy signal.
The former staffers we spoke to said that no one saw this coming. (Though former Urbanspoon/Zomato staffers in Seattle had a different take.)
“It was a complete shock,” one ex-staffer said.
They had just moved into their 5,000-square-foot office on South Broad at the end of the summer. They were working toward launching a Philly sales team, another ex-staffer said. The company had just raised $60 million in a round led by a Singapore investors.
“With this round, and with some of our markets turning profitable recently, Zomato is well capitalised for at least two years,” CEO and founder Deepinder Goyal said in September.
It’s not clear if Zomato was bringing in revenue locally — we heard differing accounts from staffers.
Many of the staffers were early in their careers and some had relocated for the job, including one staffer who joined because of the promise of travel. Zomato had said staffers would get to help launch other markets.
“I guess it was too good to be true,” the ex-staffer said.
They all got six-week severance packages, according to several ex-staffers.
Another staffer said that while it was nice to have autonomy to build the Philly office, the company suffered from a lack of local leadership. The Philly office initially answered to a senior staffer in Toronto, and later, New York. But it was hard to get in touch with them, the staffer said, as they seemed to be pulled in many different directions.
For that staffer, the whole experience seemed a lesson in learning how disposable you are.
“After you spend so much time building a market, really developing the market from the ground up, they fire [you],” the staffer said. “That’s what kind of stung the most.”