Reliance Retail and Google-backed last-minute grocery and essentials company, Dunzo is laying off about 30% of its workforce. As cited by Business Today, the recent layoffs have mostly affected engineering roles at the company. “It was mostly engineering roles, software engineers, architects, lead, even some director level people,” the business news portal mentioned.
The layoffs were made known to the employees on a Wednesday organisation-wide call. Subsequently, in the evening, there was a town hall with a Q&A session. The employees that were fired amid the layoffs were informed of this development also had a one-on-one meeting with their managers.
Reportedly, the job cuts were conducted in order to cut costs as well as streamline the company’s operations. Besides Dunzo, its competitors like Zepto, Swiggy, etc have also conducted layoffs.
According to regulatory filings, Dunzo lost Rs. 464 crore in FY 2022, which is twice as much as the Rs. 229 crores it lost in FY 2021.
In FY 22, the startup’s operating revenue was Rs 54.3 crore and its overall expenses were Rs 531.7 crore. The company’s advertising and promotional expenditures, which increased by nearly six times to Rs 64.4 crore from Rs 11 crore in FY21, were one of the main contributors to its expenses.
Dunzo Plans
Meanwhile, the company is also making headlines for securing funding of $75 million via convertible notes and is planning a shift in the business model.
About 50% of the funding is coming from Google and Reliance Retail, which holds around 20% and 25.8% shares in the company.
For the unversed, a convertible note is a short term that converts into equity, usually during a subsequent financing round or an IPO. It does not require an immediate valuation to be assigned to a firm. Speaking of, it has been widely used by Indian startups over the past few years.
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