 "Quick commerce firm Dunzo defers salaries of 50% workforce for June")
Reliance-backed quick commerce firm Dunzo has deferred the salaries of 50 per cent of its workforce of around 1,000 employees for June amid a severe cash crunch, according to sources close to the company.
Sources said this may trigger a fresh round of job cuts, the scale of which is yet to be determined. Queries sent to Dunzo did not elicit an immediate response.
Dunzo’s salary deferrals come even as the firm raised $75 million in funding through convertible notes in April this year, indicating its high cash-burn rate. The delivery platform also laid off around 30 per cent of its staff or about 300 workers, chief executive officer Kabeer Biswas had told employees during a townhall as the firm looked to revamp its business model. Dunzo had previously fired 3 per cent of its workforce – around 80 workers – in January as well.
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- In April, Dunzo raised $75 million and laid off 30% staffers
- In January, the company laid off 3% of workforce, which is nearly 80 employees
- The firm reduced its dark store count by 50% as it looked to turn profitable
Under its new marketplace business model, the company has been focusing on sourcing its products directly from the nearest supermarkets and merchants, rather than relying on the traditional dark stores adopted by its competitors.
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As a result, the company has shed its dark store count by as much as 50 per cent, focusing on stores that are profitable or nearing that threshold.
BS
The company’s primary business Dunzo Daily, which has significantly scaled down its operations, competes with the likes of Zepto, Zomato-backed Blinkit and Swiggy Instamart.
Dunzo’s cash flow issues come at a time when start-ups across sectors are clamouring to improve their margins and conserve cash amid increased investor scrutiny and funding crunch.
The Bengaluru-based firm has raised around $500 million in funding since its inception, according to data from Tracxn – a market intelligence platform.
In FY22, Dunzo’s revenue stood at Rs 54.3 crore, up from Rs 25.1 crore the previous year, according to the ministry of Corporate Affairs filings. The company’s loss, on the other hand, jumped two-fold to Rs 464 crore in FY22, against Rs 229.1 crore in FY21.