Dunzo delays staff salaries citing cash flow issues
Reliance Retail-backed Dunzo has paid only partial salaries to senior- and managerial-level employees earning over Rs 75,000, citing cash flow issues. The company has said that it will settle the remainder post-July 15.
Bengaluru-based on-demand logistics service and quick commerce companyhas delayed salary payouts for senior-level employees for the month of June, citing cash flow issues.
As per sources, employees at the Reliance Retail-backed startup were paid a maximum of only Rs 75,000, with the promise of paying out the balance post-July 15 for those drawing a higher monthly salary. The move will impact managerial-level employees. The company currently has close to 1,000 employees on its payroll.
According to reports, Dunzo is likely to resort to a second round of layoffs this month after it let go of nearly 300 employees—30% of its strength—earlier this year. In April, CEO Kabeer Biswas said in a townhall that the company was looking at making a change in the business model.
Dunzo spokesperson did not want to comment on specific queries sent to the company.
The company’s main line of business is its B2C grocery delivery service, Dunzo Daily, which competes with Zomato-backed Blinkit and Zepto, apart from Swiggy’s grocery delivery service Instamart. In FY 2022, Dunzo Daily contributed nearly 90% of the company’s revenues, however, the vertical has been struggling. Dunzo shut down operations for the service across all cities, barring Pune and Bengaluru, earlier this year.
Dunzo had last raised $75 million in convertible notes, with the lion's share coming from returning investors, Google and Reliance Retail. Reliance Retail holds close to 25.56% share in the company while Google holds about 18.53%, according to Tracxn, making them the largest shareholders in the company.
The quick commerce venture was valued at $757 million as of May 2022, according to data research platform Tracxn, and has raised $497 million to date in equity investment.
Dunzo earned Rs 54.3 crore in revenue from operations in FY22, largely from its online platform services. On the other hand, its net loss more than doubled from Rs 229.1 crore in FY21 to Rs 464 crore in FY22.
Edited by Kanishk Singh