Dunzo, a popular hyperlocal delivery platform, has reportedly announced significant layoffs, affecting 75% of its workforce. The company cited financial difficulties, including overdue payments to employees and vendors, as the primary reason for the job cuts.
According to a report by FE, Dunzo has laid off 150 employees, representing about 75% of its workforce, in a cost-cutting measure.
The report also noted that Dunzo is now operating with just 50 employees in its core supply and marketplace teams.
Following the layoffs, Dunzo now has a skeleton crew of 50 employees primarily focused on its core supply and marketplace operations. The company is aiming to reduce costs and improve cash flow to weather the financial storm.
The job cuts are part of a larger strategy to reduce expenses and boost cash flow, as the company faces increasing pressure to fulfill its financial obligations.
According to Layoffs.fyi, an online tracker for job cuts, the layoffs occurred on August 31, 2024.
Affected employees were notified via email, where Dunzo assured them that pending salaries, severance, leave encashment, and other dues would be paid once the company secured the necessary funds.
Dunzo, originally launched as a concierge service, has experienced various phases of growth and setbacks. At its peak, the company was valued at $775 million, but it has recently struggled to close a crucial funding round.
In May 2024, Dunzo was reportedly on the verge of securing $22-25 million through a mix of equity and debt from new and existing investors. However, the deal ultimately fell through.
By mid-July 2024, Dunzo informed its employees that it was in the final stages of obtaining funds and expected to settle dues within 10-15 days. Despite this, subsequent emails revealed continued delays, with the promised funding still not secured.
Now, the company is exploring ways to diversify its revenue streams beyond its core focus on merchant services, a move seen as essential to stabilising its finances and navigating these challenging times.
The layoffs have been met with concern and disappointment among affected employees and industry observers. As the company navigates these challenging times, it remains to be seen how it will adapt to the reduced workforce and continue to provide its services to customers.
