In a major blow to its employees and investors, Dunzo, the rapid goods delivery startup, is set to undergo another round of layoffs – the third in just seven months.
The company’s co-founder and CTO, Mukund Jha, revealed this alarming development during a candid conversation with employees on Wednesday, March 19.
Cashflow Challenges Plague Dunzo: Senior Executives Anticipate Over 200 Layoffs
The once-promising startup finds itself in dire straits as it grapples with severe cashflow challenges.
Industry insiders estimate that around 200 employees – approximately 20% of the total workforce – may face termination in this latest wave of retrenchments.
In the previous two rounds of layoffs, Dunzo had already let go of around 380 employees.
Funding Inaccessible Amidst Debt Obligations
Although Mukand Jha assured employees that the company holds approximately $40 million (around Rs 328 crore) in its bank account with an 18-month runway, Dunzo is unable to access these funds due to existing debt obligations.
This predicament has further exacerbated the startup’s financial woes.
Decision Pending: Layoff Size to Be Finalized Soon
During an employee interaction on July 19, Jha disclosed that the company is actively considering a retrenchment plan.
A final decision on the extent of the layoffs is expected to be taken by July 21. This looming uncertainty has left employees in a state of anxiety and uncertainty about their future at Dunzo.
Delayed Salaries Add to Employee Woes
Adding to the distress of employees, Dunzo recently sent out an email stating a delay in salary payments.
June’s pending salary, along with the salaries for July and August, will now be disbursed together on September 4. The initial date given for the June salary was July 20.
Struggles Continue Amidst Prominent Backers
Established in 2015 as a player in the Quick Commerce sector, Dunzo has raised an impressive $500 million in funding with investments from major entities such as Reliance, Google, Lightrock, Lightbox, and Bloomi Ventures.
However, the present turmoil has cast a shadow over the startup’s future, leaving investors and stakeholders concerned.
Reliance and Google Hold Major Stakes
Reliance remains the largest shareholder in Dunzo with a significant 25.8% stake, followed by Google, holding approximately 19%.
These major investors are closely monitoring the unfolding situation, hoping for a turnaround in the troubled startup’s fortunes.
