Dunzo misses salary deadline, to credit pending dues on September 4

Dunzo CEO Kabeer Biswas

Dunzo, the quick-commerce player grappling with a severe cash crunch, informed senior employees on July 19 that the remaining portion of their salary, originally due from June, will now be deferred until September 4. This is a notable delay from the previous deadline of July 20.

Dunzo had deferred the June salaries for around 500 employees, or 50 percent of its entire workforce, and had promised them that it would clear all dues by July 20 but has now pushed that deadline as it engages with investors to raise more money and sort out its cash flow issues.

To better its financial health, Dunzo also capped employee salaries at Rs 75,000 per month, irrespective of what their pay package was.

Moneycontrol has reached out to Dunzo for comments, the story will be updated if the company responds.

However, the payroll team sent an email to employees informing them about the delay.

"For those team members who were expecting the balance payouts of their June salary during this week, we regret to inform you that this has been delayed. The pending salaries for June will now be paid on September 4th, 2023. Additionally, the July salary for all team members will be paid only on September 4th along with the August salary," the email read.

Moneycontrol has reviewed a copy of the email.

"We understand this is very difficult for you and we appreciate your patience. At this stage, we need to focus on streamlining our cash flow so we can build a more sustainable business for the future. We need your support as we work through this," it added.

Moneycontrol had reported earlier reported that the recent moves could potentially lead to more staffers being sacked and voluntary exits at the Bengaluru-based startup. The company fired around 380 employees in two rounds of layoffs this year alone.

The holdback of salaries comes despite Dunzo raising $75 million in April, underscoring the company’s high cash burn rate.

Cost cuts at Dunzo are not new. As the company increases its focus on sourcing products through a marketplace model, instead of fully relying on its network of dark stores, it has reportedly shut at least 50 percent of its dark stores and exited other unprofitable markets. At the same time, it is strengthening its hyperlocal delivery vertical.

Dunzo has so far raised close to $500 million since 2015 from Reliance, Google, Lightrock, Lightbox, Blume Ventures and several others. Reliance is the largest shareholder with a 25.8 percent stake in the company, and Google was the second-largest with around 19 percent ownership in Dunzo, according to Tracxn.

Disclaimer: Moneycontrol is a part of the Network18 group. Network18 is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.