Dunzo Fires 30% of Its Workforce – LAYOFF !

Dunzo, the unicorn of quick commerce, fired 30% of its workforce three months ago in preparation for a change in the business model. According to reports, there are about 300 employees who are affected.

The layoffs follow a January firing of about 3% of Dunzo’s workforce.

Additionally, the announcement coincides with the startup quick commerce, backed by Reliance Retail, securing $75 Mn in convertible notes. According to an ET report, Google and Reliance Retail will contribute $50 million, with the remaining funds coming from other current investors.

According to the report, the CEO and founder of Dunzo Kabeer Biswas briefed staff members about the layoffs and the company’s new business model during a town hall meeting on Wednesday, April 5.

Dunzo has not responded at the time of writing the story but we will be updated once the startup responds.

Though some sources said that “Everyone was present for the organization-wide call where the leadership made the layoff announcement. Then, in the evening, there was a town hall where we could ask questions “. The fired workers’ managers personally informed them of this development.

Another source added that “all those who were affected” had one-on-one meetings with their managers.

According to sources, this round of downsizing was done to reduce expenses and streamline business processes. Competitors of the business, such as Zepto, Swiggy, etc., have also made cuts like this.

The quick commerce startup will close 50% of its dark stores after the layoffs and only operate the ones that can be profitable or are very close to becoming profitable shortly. Furthermore, wherever it closes dark stores, Dunzo will collaborate with supermarkets and other retailers.

Employees at the town hall were informed by Biswas that this call was necessary for the unicorn for it to achieve profitability within the next 18 months. While the money from the convertible notes has already arrived, sources cited by ET state that it would take Dunzo 36 months to turn a profit without having to make layoffs.

With incumbents realizing that creating an operationally profitable quick commerce business model is challenging in the current macroeconomic environment, the quick commerce bubble in India has more or less burst. Swiggy, Instamart, Zepto, and other competitors of Dunzo have also been reducing expenses and changing how they operate.

More about Google and Reliance-backed Dunzo – A Unicorn of quick commerce

The Dunzo platform, which was established in 2015 by Biswas, Dalvir Suri, Mukund Jha, and Ankur Aggarwal, links customers with nearby retailers and vendors to enable online deliveries of groceries, prescription drugs, and other daily necessities. According to sources cited by ET, it is said to have an annualized revenue run rate of about $300 Mn.

Due to a doubling of its expenses, Dunzo’s consolidated loss in FY22 increased by 2X to INR 464 Cr from INR 229 Cr in FY21.

Employee benefit expenses made up 26% of Dunzo’s total expenses in FY22, which increased to INR 531.7 Cr. In FY22, the quick commerce platform increased its spending on employee benefits to INR 138.3 Cr.

Sources say that the ‘Indian Startup Layoff Tracker,’ the layoffs at Dunzo bring the total for the year to well over 6,100 employees in the first three months.