Reliance Retail-backed Dunzo has executed another round of layoffs, reducing its workforce to just 50 employees in its core supply and marketplace teams, according to sources familiar with the situation. This downsising occurs as the Bengaluru-based online delivery firm faces a severe cash crunch while urgently seeking capital to sustain its operations.
Sources, who requested anonymity, disclosed that Dunzo has laid off approximately 150 employees in this latest wave of job cuts. The move is part of a broader effort to curb costs and generate sufficient cash flow to address mounting liabilities, including overdue salaries to current and former employees and outstanding vendor payments.
In an email sent to employees on Friday, Dunzo stated it would pay pending salaries, severance, leave encashment, and other dues to affected staff as soon as it secures the necessary funds.
This latest communication adds to the company’s ‘promise-go-round’, following a string of emails over the past few months that highlighted its financial distress.
In mid-July, Dunzo informed its employees that it was in the “final stages” of closing a transaction, with expectations to settle dues within 10-15 days. However, subsequent emails revealed persistent delays and challenges in accessing funds.
On August 12, Dunzo’s payroll team notified employees of unexpected obstacles in obtaining the required funds and urged them not to pursue legal action, warning that such actions could “just delay the ongoing process”.
Once valued at $775 million, Dunzo has been struggling to close a crucial funding round. In May, the company was reportedly close to securing $22-25 million through a mix of equity and debt from both new and existing investors.
Originally launched as a concierge service, Dunzo has pivoted several times and is now exploring additional revenue streams to complement its core merchants business. Sources indicate that the company is eyeing its business-to-business (B2B) segment as a potential growth area.
Despite raising nearly $470 million to date, with Reliance Retail holding a 25.8% stake as the largest shareholder, Dunzo has struggled to achieve profitability. The company reported a net loss of Rs 1,802 crore in FY23.
Dunzo did not respond to a request for comment at time of going to press.