Dunzo lays off 75% of staff; retains just 50 employees
The food delivery company is said to have asked 150 of its employees to quit in a bid to cut costs and generate cash flow to fulfil its financial obligations
Instant delivery company Dunzo, has slashed its workforce by almost 75 per cent, retaining just 50 employees in its core supply and marketplace teams, reports said.
Reports quoting sources familiar with the layoffs said that the delivery aggregator has asked 150 of its employees to quit.
Cost-cutting initiative
The Bengaluru-based company, which is backed by Reliance Retail, has reportedly taken the decision in view of a severe cash crunch and need for capital to sustain operations.
The sources also said that the decision, finalised on August 31, is part of the company’s initiative to cut costs and generate sufficient cash flow to be able to handle rising liabilities like pending salaries and unpaid bills of vendors.
Assurance to affected employees
The company in an email sent to its employees on Friday has reportedly assured the staff who are being laid off that it would pay their pending salaries, severance, leave encashment and other dues as soon as it gets the necessary funds.
Obstacles in funding
The company, which was once valued at $775 million, has been facing obstacles in finalising a crucial funding round.
In May, the company came close to securing $22-25 million through equity and debt from investors, but the deal too couldn’t move forward, delaying payments.
Even though the company in a mail to employees in July this year, assured that it was in the “final stages” of closing a transaction that will help it settle pending dues, the deal reportedly didn’t materialise.
