Dunzo delays 50% of June salary, may consider additional layoffs

Dunzo, the quick-commerce company backed by Reliance Retail, is reportedly preparing for another round of layoffs following its substantial job cuts three months ago. Additionally, due to a "cash-flow issue," the company has deferred 50% of the June salary for management-level and above staff members.

According to media reports, Kabeer Biswas, the founder and CEO of Dunzo, addressed employees during a recent town hall meeting and disclosed that the June salary would be delayed due to a cash-flow issue with lenders. This announcement comes after Dunzo secured a funding round of USD 75 million through convertible notes in April.

During the month of April, the company implemented workforce reductions, resulting in the termination of over 300 employees, which accounted for approximately 30% of its workforce. Simultaneously, the company devised a strategy to undergo a business model transition aimed at reducing operational costs.

According to reports, the pending wage dues are expected to be transferred by mid-July. The challenges faced by Dunzo shed light on the hardships encountered by startups as funding becomes more constrained and investors request measures to conserve cash and extend their financial runway.

Reliance Retail, Dunzo's investor, holds a 25.8% ownership stake in the company, while Google holds approximately 20% ownership.

In an April town hall meeting, Biswas informed the staff about the implementation of job cutbacks, explaining that these changes were driven by modifications to the company's business model and objectives.

Dunzo's objective was to shut down 50% of its dark stores and continue operating only those that could generate profits or were in close proximity to achieving profitability. Dark stores are compact warehouses that enable e-commerce companies to fulfill orders within a timeframe of 15 to 30 minutes.