Zepto, the Indian quick commerce firm famous for its lightning-fast delivery options, has encountered a temporary setback. Its fast-food delivery segment, Zepto Cafe, has stopped operations in several small cities, especially in North India. The operation shutdown impacts almost 44 Zepto Cafe locations and more than 400 staff members, indicating a significant change in the company’s business strategy at a critical juncture.
Zepto Cafe’s Growth: An Unsteady Rise
This is only a week after Zepto Cafe reached an impressive milestone. 1 lakh order daily, testifying to how popular it is and in demand. But even as its daily orders skyrocketed, there were problems working behind the scenes that compelled the company to take a break, rethink, and review its expansion strategy.
Temporary Halt in Crucial Tier-2 and Tier-3 Cities
Zepto Cafe has suspended operations in cities like Agra, Chandigarh, Meerut, Mohali, and Amritsar. They are not metro centres but still important places in Zepto’s Tier-2 and Tier-3 market expansion. The short-term closure is said to be due to supply chain disruptions, a company statement released to media publication ET Now.
Response by the Company
Zepto clarified that the move was not an indication of withdrawal but a strategic pause. The company is still hopeful about the future of Zepto Cafe and highlighted its intention to reinvest and resume services in these cities by the end of the next quarter.
“We remain committed to the cafe business and will invest aggressively going forward,” a Zepto spokesperson said.
Restructuring Occurring?
While the pause is temporary, the scale, 44 cafes and 400+ employees, indicates significant internal restructuring, suggesting that Zepto is closely evaluating the operational viability of each location.
Workforce Restructuring and Cost Optimization
One of the most direct effects of the suspension has been on the staff. With more than 400 staff members impacted, many of them find themselves unsure of their future with Zepto. As per reports, the business is also reducing staff levels across multiple operating cafes to lower the average store employee count. Earlier, a standard Zepto Cafe store had around nine employees. This is now set to be scaled down to seven or eight in the hope of cutting expenses.
Zepto’s Cost Control
This move is also part of Zepto’s larger initiative to control increasing employee costs. In a Moneycontrol report, Zepto’s wage bill in April 2025 was INR 95 Cr, a figure lower than in earlier months but still around 80% of the wage bill spent by Zomato and Swiggy. This, even though Zepto has just half the number of employees of its older rivals.
Zepto Available in Which Cities?
Currently, Zepto delivers to most major cities. The Zepto Café has halted operations in Delhi NCR, Agra, Meerut, Haridwar, Gorakhpur, Mohali, Amritsar, and Ghaziabad. These Zepto cities may be serviceable again soon.
Revenue in Past Months
Despite the dwindling numbers of zepto available cities, the revenue is steadily declining. Zepto café stories are certainly interesting, from an economic standpoint.
March 2025
INR 115–120 Cr
February 2025
INR 105–110 Cr
January 2025
INR 105–110 Cr
April 2025
INR 95 Cr
These numbers highlight the unsustainable growth in the cost of staff, particularly when Zepto is going all out for market share in the super-competitive quick commerce and food ordering space.
Hyderabad Delivery Partner Unrest Piles Pressure
Compounding Zepto’s operational challenges is the continuous delivery executive strike in Hyderabad, which was at its fifth day when this report was filed. The strike, led by the Telangana Gig and Platform Workers’ Union (TGPWU), has brought to light reported labour abuses by Zepto.
The problem started when Zepto apparently cut delivery charges from INR 35 per order in April to mere INR 10–12 in May. The sudden reduction has affected the incomes of gig workers who are mostly paid per-delivery.
Union Demands Justice
“The managers here in Hyderabad have informed us that Zepto won’t be raising the fees,” said TGPWU President Shaik Salauddin.
The TGPWU has now lodged a complaint to Additional Labour Commissioner E. Gangadhar in writing, check it’s looking for government action. The complaint is what the union has identified as “continued labour rights abuses”, among them Zepto’s refusal to negotiate with its delivery partners.
Delivery personnel in several dark stores in Hyderabad are reported to be joining the protest, calling for fair remuneration and improved working conditions.
Increasing Challenges Despite Plans for IPO
What adds to the significance of these developments is the timing. Zepto is said to be preparing for a stock market listing in early 2026. The public listing of the company will be a big milestone for the Indian startup ecosystem, particularly in the fast commerce space.
The recent setbacks, however, such as operational halts, internal revamps, employee mutinies, and burnout rates, may make its IPO story more complex.
Zepto’s Finances: Shaky or Stable?
Despite all these headwinds, Zepto’s financials in FY24 have improved slightly:
Net loss INR 1,248.64 Cr (from INR 1,271.84 Cr in FY23)
Operating revenue
INR 4,454 Cr, a 120% growth from INR 2,025.70 Cr in FY23
While the net loss decreased only by roughly 2%, the massive revenue growth indicates that Zepto’s core business is healthy. But sustaining the momentum while keeping costs in check and dealing with internal disruptions will be critical.
Dissent Arises Among the Top Brass
Interestingly, Eternal co-founder Deepinder Goyal had earlier mentioned that Zepto was burning around INR 2,500 Cr per quarter. Zepto CEO Aadit Palicha has refuted this claim, refusing to admit that the numbers have been misstated.
The Road Ahead: Challenges and Opportunities
The short-term closure of Zepto Cafe in 44 outlets is a strong indication that the company is on the threshold of a recalibration phase. Although Zepto has witnessed spectacular order and revenue growth, it now needs to correct its structural and financial frailties to stay afloat against competition from key players such as Zomato, Swiggy, and Blinkit.
Factors Affecting Zepto Cafe’s Sales
In the coming months, these factors could potentially affect Zepto’s fate.
1. Supply Chain Stability
Reviving suspended cafes will be contingent upon how well Zepto is able to address logistical challenges, especially in less developed areas.
2. Labor Relations
The current Hyderabad strike might be a precedent. How Zepto responds to the needs of its gig workers will impact its public perception and operational effectiveness.
3. Cost Management
Reducing employee numbers and managing salary costs will continue to be a focus if Zepto is to enhance profit margins before its IPO.
4. Public Perception
Since investor focus is on labour practices and burn rates, Zepto must double down on transparency and accountability.
Conclusion
Zepto Cafe’s temporary slowdown in smaller towns is not the end of the road, but just a breather for recalibration. With the company traversing a complicated combination of scaling challenges, financial stress, and labour turbulence, its next steps will be carefully monitored by investors, customers, and regulators as well. In the meantime, the next quarter will be decisive in whether Zepto can convert short-term reversals into long-term survival.
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