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NEW DELHI: Cash-strapped quick commerce startup Dunzo which has been delaying salaries of its employees has commenced fresh layoffs which could impact about 200 people, according to sources aware of the discussions. A Dunzo spokesperson declined to comment when contacted. CEO and co-founder Kabeer Biswas did not respond to messages.
Last week, TOI had reported that the startup has deferred salaries of some of its employees by up to 50% for the month of June. Dunzo which was initially expected to disburse the rest of the June salaries to the affected staff later this month is understood to have postponed the payments to September.
The development comes about three months after the firm backed by Google and Reliance Retail laid off some 300 employees. A few of Dunzo’s employees have attached the open to work badge to their Linkedin profiles. Amid a prolonged funding winter and strict investor vigilance, startups have been attempting to check their expenses and resorting to cost cutting measures to extend their runway. Funding for startups declined to $3.8 billion in the first half of 2023 from $18.3 billion in the year-ago period, according to a recent analysis by PwC.
Last year, Reliance Retail had infused about $200 million into the Bengaluru-based company for a 25.8% stake. Competition in the quick commerce space has intensified with the entry of players like Zepto while bigger rivals like Swiggy Instamart, backed by deep pocketed investors have been investing billions of dollars into the quick commerce business. The model is a cash guzzling one and it’s difficult to make the business economics work. Dunzo, it is learnt, is also looking at restructuring after it shut down several of its stores to rein in cash burn. The company has raised over $450 million from investors in all.
Last week, TOI had reported that the startup has deferred salaries of some of its employees by up to 50% for the month of June. Dunzo which was initially expected to disburse the rest of the June salaries to the affected staff later this month is understood to have postponed the payments to September.
The development comes about three months after the firm backed by Google and Reliance Retail laid off some 300 employees. A few of Dunzo’s employees have attached the open to work badge to their Linkedin profiles. Amid a prolonged funding winter and strict investor vigilance, startups have been attempting to check their expenses and resorting to cost cutting measures to extend their runway. Funding for startups declined to $3.8 billion in the first half of 2023 from $18.3 billion in the year-ago period, according to a recent analysis by PwC.
Last year, Reliance Retail had infused about $200 million into the Bengaluru-based company for a 25.8% stake. Competition in the quick commerce space has intensified with the entry of players like Zepto while bigger rivals like Swiggy Instamart, backed by deep pocketed investors have been investing billions of dollars into the quick commerce business. The model is a cash guzzling one and it’s difficult to make the business economics work. Dunzo, it is learnt, is also looking at restructuring after it shut down several of its stores to rein in cash burn. The company has raised over $450 million from investors in all.
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