BackDunzo lays off 30% of its workforce while securing $75 million funding: Reports
The layoff plan is aimed at helping Dunzo turn a profit before its planned IPO.
PremiumDunzo has announced that it will cut its workforce by 30%, resulting in almost 300 layoffs. The grocery delivery platform has also secured funding worth $75 million, with Google and Reliance Industries believed to be among the investors, as per media reports. Livemint could not independently verify the development.
Dunzo informed its employees of the job losses during a town hall meeting on April 5, stating that it was looking to pivot its business strategy to achieve profitability ahead of the IPO. The move is aimed at helping Dunzo turn a profit before its planned initial public offering (IPO) in 2025.
The latest news comes as Dunzo faces increasing competition in India's highly competitive e-commerce market. While the pandemic has driven demand for online delivery services, it has also led to challenges such as supply chain disruptions and increased costs.
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Dunzo was founded in 2015 and has grown rapidly in recent years, offering a range of services from grocery delivery to pet supplies. The firm has also been exploring new areas such as bike taxi services and has raised over $200 million to date.
In January, Dunzo laid off around 60-80 employees, amounting to almost 3% of its workforce. The layoffs came months after Dunzo had shut some of its dark stores in a bid to cut costs.
Dunzo CEO and cofounder Kabeer Biswas released a statement that time, saying that letting people go was always a difficult decision and the company was constantly working on redefining business processes at scale. He added that the impacted employees were being provided with the best support possible during their transition.
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Dunzo is just one of many Indian startups that have had to cut costs by laying off employees due to macroeconomic headwinds and a funding winter.
The job market in India has been challenging for some time now, and the COVID-19 pandemic has only made things worse. Many startups in the country have struggled to raise funds, while others have had to pivot their business models to stay afloat.
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