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Dunzo defers salary payments of its employees again: Details

Dunzo, one of India’s popular quick commerce startup which is backed by Google on Wednesday told its employees that the pending salaries since June have now been deferred till September.

This comes a fortnight after the startup had said that June salaries will be paid out by July 15. The payroll team confirmed that salary payments will be made by September 4.

“At this stage, we need to focus on streamlining our cash flow so we can build a more sustainable business for the future,” said the company’s email to its employees. Last week, Dunzo which is facing a cash crunch, capped salary payouts to Rs 75,000 each for the month of June. Around 500 employees are said to be affected by the move which accounts for almost 40-45% of the company’s workforce.

Dunzo also fired around 30% of its workforce in the month of April.

As per the letter, team members who were expecting balance payouts of June salary during this week will have to wait till September as the situation is uncertain for the Reliance Industries backed company.

The letter employees received on mail further said, “the pending salaries for June will now be paid on 4 September 2023. Additionally, the July salary for all team members will be paid only on 4 September along with the August salary. While we have set 4 September as the date for all pending salary payouts, we are working to resolve this issue at the earliest to minimize the impact of our team members.”

The delay in salaries comes even after the company raised $75 million in debt funding through convertible notes.

In addition to Google and Reliance Industries, Lightbox, Evolvence, Alteria Capital among others are investors in Dunzo.

As per internal reports, the company is planning for a new round of funding of $50 million from new investors.

Amid large funding crunch, Dunzo is said to be adopting asset light model where it is shutting down half of its dark stores and will focus on maintaining only those that have stronger unit economics.

Adesh Dixit

Adesh Dixit is a graduate of Journalism and Mass Communication. He is a passionate and energetic individual with commendable content-writing skills. Adesh is currently working as a journalist at BusinessUpturn.com and can be contacted at adesh_dixit@businessupturn.com