Dunzo, backed by Google, Reliance, resorts to fresh layoffs to cut costs: Sources

Reliance- and Google-backed quick commerce company Dunzo has resorted to fresh round of layoffs to cut costs, Business Today has learned from sources. The company has informed the employees that they would receive their full and final settlements in January. At the time of publishing this article, Business Today couldn't confirm the total number of redundancies at the firm but multiple teams are said to have been impacted.

An employee who was let go from the engineering team of the company told Business Today, “The company has said that the full and final settlement will take place in January.”

Another employee confirmed this development and noted that the separated employees have the option to skip the notice period as well.

“We can either serve notice period in October or skip it. Either way, full and final settlement will be in January. The full and final settlement will include the pending salaries of the past months, which were deferred since June, and 15 days severance,” the employee said,” an employee said about what they heard from the management.

Business Today has reached out to Dunzo for a response on the same and this article shall be updated as and when it responds. In July, Business Today reported that the quick commerce company had deferred a part of their employees due to cash crunch.

The Reliance- and Google-backed startup had laid off 30 per cent of its staff after securing $75-million funding in April this year. Moreover, the company management also planned a pivot in business model and decided to shut 50 per cent of its dark stores across the country.

Earlier on Monday, Moneycontrol reported that Dunzo is in advanced stages to close a $25 million-30 million funding round with key investors like Reliance Retail, Google, Lightrock participating in the round.

With 25.8 per cent stake, Reliance Retail is already the single largest shareholder in Dunzo.

According to Ministry of Corporate Affairs filings, in FY22, Dunzo reported a total revenue of Rs 67.7 crore. The company’s expenses stood at Rs 531.7 crore. The operating revenue was at Rs 54.3 crore and consolidated loss stood at Rs 464 crore.

It is worth noting that the company’s biggest expenses driver was employee benefit expenses, which stood at Rs 138 crore. This was followed by its advertising and promotional expenses, which stood at Rs 64.4 crore, up almost 6 times as compared to Rs 11 crores which was incurred in FY21.

As per data from Tracxn, Dunzo, which was founded in 2014, has raised close to $500 million from Reliance Retail, Google India, Lightrock, Lightbox, Blume Ventures and other investors. Furthermore, Reliance Retail is the largest shareholder with a 25.8 per cent stake in the company, and Google is the second-largest with around 19 percent ownership in the quick commerce company.

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