Dunzo Conducts Fresh Round Of Layoffs, To Pay June-July Salaries Only By February Next Year

Even as it looks to raise fresh funds, troubled hyperlocal delivery startup Dunzo continues to jettison people from its ranks.

Dunzo is conducting another round of layoffs, ET reports. Dunzo has previously laid off employees at least twice this year — it had laid off 60-80 employees in January, and had laid off 300 employees in April. The exact number of employees affected in the latest round of layoffs is not known, but the company had indicated it wants to eventually only have 200 employees on its rolls, down from nearly 1,000 at the beginning of the year.


And the employees impacted by the latest round of layoffs will continue to wait even longer for their June salaries. Dunzo had been unable to pay its June salaries to employees, which had been the first public sign of the troubles at the hyperlocal startup. The company had first said it would pay the salaries by September, and then said it would pay them in October. Dunzo now says that the laid off employees will receive their June salaries only by February next year.

As part of the latest job cuts, impacted employees have been given two options — the first being that they could immediately cease to work, and receive their pending salaries and other dues by January or February next year. The second option is to serve their respective notice periods and receive September salaries in the first week of October. In both cases, the final settlements and pending salaries from June and July would only be paid by January or February.

Dunzo is also looking to look at other ways to cut costs. It’s slated to move into a smaller office, partly to save on rents, and partly because with a much smaller team, it doesn’t need the office it earlier occupied. Dunzo has also shut down several dark stores across the country over the last few months.

But amidst all this doom and gloom, there might be a ray of hope. Dunzo is reportedly in the final stages of raising $30-35 million from investors including Reliance Retail, which already owns 26% in Dunzo, and existing investors Google, Lightrock DS Group and others. The funding will be on onerous terms, which will favour existing investors, and require the company to cut down its monthly burn to $300,000, and reduce its headcount to just 200.

But a funding round of any sort will be a lifeline for Dunzo, which is currently navigating a torrid period where it’s been unable to pay salaries, been sued by its creditors, and had to shut down parts of its business. It still seems to be gamely fighting, but rivals including Zepto, Swiggy Instamart and BigBasket are only growing their leads over the company which had in many ways pioneered the hyperlocal delivery revolution. It remains to be seen how Dunzo will fare in the coming months, but it’ll take a turnaround for the ages for it to once again compete in an already crowded — and well-funded — hyperlocal field.