Reliance, Google-backed Dunzo lays off 75% of its workforce
Dunzo, the Bengaluru-based online delivery start-up backed by Reliance and Google, has reportedly laid off 75% of its workforce. The Financial Express reports that this significant reduction leaves only 50 employees in the company's core supply and marketplace teams. The layoffs were implemented on August 31, according to Layoffs.fyi, an online tracker. This move is part of a broader strategy to manage costs and generate cash flow to meet increasing liabilities.
Dunzo's commitment to settle employee dues
Dunzo has communicated the recent downsizing to its employees via email. The company has pledged to settle pending salaries, severance packages, leave encashment, and other dues for affected employees as soon as it secures the necessary funds. Despite facing numerous challenges and shifts since its inception as a concierge service, Dunzo remains committed to fulfilling its financial obligations toward its employees.
Dunzo's struggle to secure critical funding
Dunzo, once valued at $775 million, has been grappling with securing a crucial funding round. In May this year, the company was reportedly on the verge of securing $22-25 million through a mix of equity and debt from both new and existing investors. However, despite informing employees in mid-July about being in the final stages of closing a deal expected to settle dues within 10-15 days, the transaction did not materialize due to persistent delays and challenges.
Dunzo's diversification strategy and unsettled dues
Dunzo is now exploring ways to diversify its revenue sources beyond its primary merchant-focused operations. The company aims to generate profits to settle liabilities including salaries of current and former employees as well as vendor payments, while seeking capital for survival. Dunzo also owes salaries including full and final settlements to several ex-employees. In September, the firm partnered with payroll servicing firm OneTap to disburse salaries for certain months.
