Reliance Retail-backed Dunzo may cut more jobs to pare costs; defers 50% of June salary

economictimes.indiatimes.com:

Reliance Retail-backed quick commerce startup Dunzo may finalise its plans to terminate more jobs. It has had to already defer half of the June salary for employees at the manager level and above due to a ‘cash flow issue’, according to sources aware of the matter. Kabeer Biswas, founder and CEO of Dunzo, which closed a $75 million financing round through convertible notes in April, told his staff in a recent town hall that the June salary would be delayed due to a cash flow issue related to lenders, according to the people cited above.

This comes after Dunzo fired about 30% of its workforce, or over 300 staff, in April, as reported by ET, while simultaneously planning a shift in its business model. The April job cuts were the second round of layoffs that month. While sources close to the company said the pending salary dues would be transferred by the middle of July, Dunzo’s difficulties underscore the challenges startups have been facing amid tightening of funding and stronger demands from investors to conserve cash and extend their runway.

“They (Dunzo) have been told to run a tight ship and continue to optimise on costs. Every quarter, the firm is looking to cut costs by 5-7%, but it could be more in the ongoing quarter,” one of the persons aware of the development said. A second person aware of the discussions between Dunzo’s key investors and the firm said job cuts and other measures to conserve cash were on the anvil.

A spokesperson for Dunzo declined to comment while an email sent to Reliance Retail did not elicit any response. Reliance Retail owns 25.8% of Dunzo and is the single-largest investor in the firm. Google has a stake of just under 20%.