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Wednesday, October 4, 2023

Dunzo initiates new layoffs; the move could affect about 200 employees

NEW DELHI: Cash-strapped fast trading startup dunzo that has been delaying the salaries of its employees has initiated new layoffs that could affect about 200 people, according to sources familiar with the discussions. A Dunzo spokesman declined to comment when contacted. CEO and co-founder Kabeer Biswas did not respond to messages.
Last week, TOI had reported that the startup had deferred the salaries of some of its employees by up to 50% for the month of June. Dunzo, who was initially expected to disburse the remainder of June salaries to affected staff later this month, is understood to have postponed payments until September.
The development comes about three months after the company backed by Google and Reliance Retail laid off about 300 employees. Some of Dunzo’s employees have attached the open to work badge to their Linkedin profiles. Amid a prolonged funding winter and tight investor surveillance, startups have been trying to control their spending and resorting to cost-cutting measures to widen their runway. Funding for startups dropped to $3.8 billion in the first half of 2023 from $18.3 billion in the prior-year period, according to recent PwC analysis.
Last year, Reliance Retail pumped around $200 million into the Bangalore-based company for a 25.8% stake. Competition in the fast trading space has intensified with the entry of players like zepto while bigger rivals like Instagramart Swiggy, backed by deep-pocketed investors, has been pouring billions of dollars into the fast trading business. The model is a cash hog and it’s hard to make business economics work. Dunzo, it was learned, is also considering restructuring after it closed several of its stores to control the loss of cash. The company has raised more than $450 million from investors in total.

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