Zepto Cafe Halts Operations In Multiple Cities

Quick delivery major Zepto’s has temporarily shut operations in multiple small cities, mostly in north India, like Agra, Chandigarh, Meerut, Mohali and Amritsar.

According to an ET Now report, about 44 cafes have paused operations, impacting over 400 employees.

In a statement to ET Now, Zepto confirmed the development and said that operations at some cafes have been put on hold to address supply chain challenges. The startup expects to resume operations in these locations by the end of the next quarter.

“We remain committed to the cafe business and will invest aggressively going forward,” a company spokesperson was quoted as saying.

Besides, the report also said that Zepto has decided to cut down the workforce at many of its cafes. While a Zepto Cafe store has 9 staff on an average, the startup plans to bring down to 7-8 for many cafes.

This comes at a time when Zepto’s employee costs are on the rise. As per a report by Moneycontrol, Zepto’s employee salaries cost stood at INR 95 Cr in April. While this was lower than in the previous months, its wage bill was 80% of what food delivery majors Zomato and Swiggy spend, despite Zepto having about half of their headcount.

As per the report, Zepot spent as much as INR 115 Cr to 120 Cr on employee salaries in March and INR 105 Cr to INR 110 Cr in January and February.

Meanwhile, Zepto delivery executives in Hyderabad are on an indefinite strike against the startup. The strike, which entered the fifth day today, is against Zepto’s decision to slash delivery fees.

(The story will be updated soon.)

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