Google-backed Dunzo defers June salaries for 500 employees

Dunzo CEO Kabeer Biswas

After a string of layoffs this year, Google-backed Dunzo, the quick-commerce player, has now deferred the salaries of 50 percent of its employees for the month of June, Moneycontrol has learnt. The company’s top management will be the most affected by the move, people aware of the developments added.

The decision was primarily because the company was facing issues managing its cashflows, despite raising $75 million in April this year, underscoring the company’s high cash burn rate. In the same month, Dunzo also fired around 300 employees in its second cost-cutting move, after it had let go of around 80 staffers in January 2023.

Dunzo has over 1,000 employees in total and the latest decision to defer salaries will impact about 500 of them, the people cited above told Moneycontrol. The decision also indicates that there could be more layoffs in the pipeline, they added. The startup has, however, assured staffers that it would be paying them salaries later this month.

The company declined to comment on Moneycontrol’s queries.

Cost cuts at the Bengaluru-based company are not new. Over the past few months, Dunzo is also increasing focus on sourcing products through a marketplace model, instead of fully relying on its network of dark stores. The company now buys products from the nearest supermarket and delivers them to customers, rather than storing items in-house contrary to what Swiggy Instamart, Blinkit and Zepto do.

That move has reportedly led to Dunzo reducing its dark store count by around 50 percent. The company also began charging higher delivery fees, delaying deliveries and also levying convenience fees on users as it looks to earn more money per order and put itself on a path to profitability.

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 25.6 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.