Months After Shutting A Few Dark Stores, Reliance-Backed Dunzo Fires Employees

Months after it shut a few of its dark stores to optimise cost, Reliance-backed quick commerce startup laid off nearly 3% of its workforce last week.

With this, the startup joined the long list of Indian startups which have laid off employees over the last year or so to cut costs amid a funding winter and macroeconomic headwinds.

“As we scale from 10 to 100, we are continuously learning how to redefine business processes at scale. Any decision that impacts people is tough, and always our last option,” Dunzo CEO and cofounder Kabeer Biswas said in a statement. 

“Last week, we had to part ways with 3% of our team strength. Whatever the numbers, these are people who chose to build their careers with Dunzo, and it is sad to have talented colleagues leave us. We are extending the best support possible to help them during this transition,” Biswas said, adding that the company is continuously looking at its team structures and network design to build efficiency in its teams.

While the startup didn’t disclose the exact number of impacted employees, the Economic Times, citing sources, reported that around 60-80 employees lost their jobs. 

As per Dunzo’s LinkedIn profile, it has over 3,000 employees in the company.

The layoffs at Dunzo come months after it secured $6.2 Mn (INR 50 Cr) in debt funding from BlockSoil India in November 2022. In the same month, the startup also said that it was shutting down a few of its dark stores across Indian cities to optimise cost.

Dunzo’s consolidated loss in FY22 widened 2X to INR 464 Cr from INR 229 Cr in FY21 on the back of doubling of its expenses. 

In FY22, Dunzo’s total expenses grew to INR 531.7 Cr from INR 258.5 Cr in the prior fiscal year, with employee benefit expenses accounting for 26% of the total expenditure. The quick commerce platform’s expenditure on employee benefits jumped to INR 138.3 Cr in FY22 from INR 91.8 Cr in the prior year.

Meanwhile, its total revenue stood at INR 67.7 Cr in FY22, registering a little over a 2X rise.

Amid the restructuring efforts, recent reports suggest that Dunzo is in talks to raise up to $100 Mn (INR 825 Cr) through convertible notes.

Founded in 2015 by Biswas, Dalvir Suri, Mukund Jha, and Ankur Aggarwal, Dunzo’s platform connects its consumers with nearby stores and vendors to facilitate online deliveries of groceries, medicines, and other everyday items. It competes with the likes of Swiggy Instamart and Zomato’s Blinkit, among others.

In 2022, at least 52 Indian startups laid off around 18,000 employees in their companies. The change in year has brought no relief to employees of startups. In the first few weeks of 2023, startups including Sharechat, Ola, Moglix, and LEAD have sacked hundreds of employees.