Dunzo Delays Salaries Yet Again; CEO Warns Of Another Round Of Layoffs

Troubled quick commerce startup Dunzo has reportedly once again deferred the payment of pending salaries of its employees for the months of June and July and said that the wages would be credited in November. 

As per The Economic Times, Dunzo cofounder and chief executive officer (CEO) Kabeer Biswas informed the employees of yet another delay during an internal meeting on Friday (September 15). 

People familiar with the development told the publication that Biswas warned the attendees of another round of layoffs if the cash flow situation further worsens for the startup. However, he did not specify the timeline or the quantum of potential layoffs. 

The Dunzo CEO, however, ‘promised’ the workforce that their salaries for the month of September would be cleared in time in the first week of October. 

The Reliance Retail-backed startup is now also looking to vacate its current headquarters on Bengaluru’s Wind Tunnel Road in a bid to further slash expenses, Biswas said. 

This is the fourth major delay by the company in releasing the pending dues of its employees. On multiple occasions in the past two months, it has missed the deadline for releasing the salaries of its employees. 

The matter first came to light in July this year after Inc42 reported that the company postponed the payment of salaries to 50% of its workforce and capped salary payouts at INR 75,000 per month per employee. Afterwards, Dunzo promised employees that the pending salaries would be released by September. Last month, it yet again deferred the deadline to the first week of October. 

Gripped by a funding crisis, the quick commerce major then laid off 30% of its workforce, or 300 employees, as pressure mounted from vendors for non-payment of dues. It reportedly owes INR 11 Cr to suppliers and faces seven legal notices from them for non-payment of dues. 

In the latest development earlier this week, reports surfaced that Dunzo was going to pay the pending salaries for the month of August through payroll financing app OneTap. As employees reportedly protested putting in their credentials fearing financing liability, the company is said to have gathered employee details and sent the data to OneTap.

Meanwhile, Dunzo has undertaken a slew of cost-cutting measures, including shutting most of its dark stores and pivoting to a marketplace model. It has also been reaching out to investors for raising funds as the crisis continued to unravel at the company. 

It was last reported in late August that the company was in advanced talks to raise $100 Mn as part of its Series G funding round, in a mix of equity and debt, from existing investors, including Lightbox and Lightrock. So far, there has been no clarity on the matter.

Note: We at Inc42 take our ethics very seriously. More information about it can be found here.