Dunzo, the quick commerce platform, has once again delivered a blow to its employees as it announced fresh layoffs during an ‘all hands’ meeting on Friday. This marks the third time the company has resorted to laying off staff in 2023, indicating ongoing challenges for the startup.
While Dunzo did not disclose the exact number of employees affected by this latest round of layoffs, sources suggest that approximately 20-25% of the workforce will be handed pink slips. The previous rounds of layoffs, which occurred in April and January, resulted in nearly 300 and 3% of the workforce being laid off, respectively, bringing the total number of employees let go to over 400 this year.
Reports in the media point to cash flow issues as the reason behind these layoffs, and it appears that the company aims to cut costs by 30-40% to address the financial challenges. In addition to this, Dunzo has faced notices from tech giants Google and Facebook, along with Nilenso, over unpaid dues, adding to its financial woes.
Employees have also raised concerns about Dunzo’s failure to file tax deducted at source (TDS) for their employees over the last six months. Moreover, certain employees at manager-level positions and above have faced salary postponements, with 50% of their salaries deferred. The company, however, missed the last deadline and delayed salaries for several employees by an additional 40-45 days until September 4.
In terms of financials, Dunzo’s revenue from operations showed growth, reaching Rs 54.3 crore in FY22, up from Rs 25.1 crore in FY21. However, the company’s losses deepened at a similar pace, increasing from Rs 229 crore in the previous year to Rs 464 crore in FY22.
Despite the challenges, Dunzo has secured significant funding amounting to around $475 million from notable investors such as Reliance, Google, Lightbox, and Blume Ventures, among others.
As of now, the company has not responded to queries about the recent layoffs and financial situation. The situation remains fluid, and stakeholders await updates on Dunzo’s measures to navigate the tough market conditions and achieve financial stability.