Bengaluru-based start up Dunzo lays off 50% workforce, only 50 employees remain: Report
By Vinaykumar Patil | First Published Sep 2, 2024, 3:45 PM ISTDunzo, the quick-commerce startup backed by Reliance Retail, has cut 75% of its workforce, leaving only 50 employees. Struggling with a cash crunch and overdue payments, the company aims to address debts and secure funding. The layoffs reflect broader issues in the startup ecosystem.
Dunzo, the quick-commerce startup backed by Reliance Retail, has dramatically reduced its workforce by 75%, leaving just 50 employees in its core supply and marketplace teams, according to recent reports.
Once a leader in India's online delivery sector, Dunzo saw rapid growth and garnered significant investment from major players like Reliance Retail and Google. However, the company has struggled to compete and sustain its business amidst fierce competition.
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In recent years, Dunzo has faced numerous challenges and made several tough decisions to try to recover from financial difficulties. Despite these efforts, the company has now laid off approximately 150 employees. The layoffs are part of a broader strategy to cut costs, address outstanding debts, and secure necessary funding.
Sources familiar with the situation revealed that the layoffs are intended to help Dunzo manage its severe cash crunch. The company is struggling with overdue salaries for both current and former employees and outstanding payments to vendors, according to a report on TOI.
In an email sent to employees on Friday, Dunzo assured that it would settle pending salaries, severance pay, leave encashment, and other dues as soon as it secures the required funds. This message is part of a series of communications from the company regarding its financial troubles and ongoing efforts to raise capital. Earlier in July, Dunzo had indicated that it was nearing the completion of a financial transaction and expected to resolve its dues within 10-15 days. However, subsequent updates revealed continued delays and difficulties in securing the necessary funds.
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The latest round of layoffs at Dunzo is a significant concern not only for the company but also for the wider startup ecosystem. The substantial job cuts could impact service quality and potentially undermine investor confidence, serving as a warning to other startups about the importance of financial stability.
Dunzo's recent communication to employees also highlighted the need for better financial management and support for startups.
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