Dunzo faces salary delays; Reschedules payments to October

Bengaluru-based quick grocery delivery start-up, Dunzo, backed by Reliance and Google, is experiencing delays in salary disbursements for its employees, attributing the setback to ongoing fundraising difficulties. To manage the situation, the company has chosen to implement batch payments.

Initially, Dunzo had assured its employees that August salaries would be disbursed starting on September 4. However, it recently communicated to its workforce that these payments would be staggered due to "certain procedural requirements." This adjustment is expected to necessitate an additional day or two for completion.

An email addressed to the employees and reported by Moneycontrol provided further insights into the situation. It conveyed, "Team members whose salary has been processed will receive an email confirmation. Rest assured you will receive your August 2023 salary within this week without fail."

Further complicating matters, Dunzo has announced a postponement of salaries to the first week of October, citing these same procedural requirements. In an attempt to reassure its employees, Dunzo has reiterated its commitment to disbursing the August 2023 salaries within the week and issued apologies for the delay.

The start-up had previously committed to an interest payment of 12% per annum on the salary component that had been withheld since June. Reports circulating in the market have suggested that Dunzo was actively engaged in advanced discussions to secure funding in the range of $80-100 million through a series G funding round, with participation from existing investors such as Lightbox and Lightrock.

Dunzo's financial struggles have escalated to a critical level, as it faces legal notices from more than seven companies and vendors, collectively amounting to claims exceeding ₹11 crore. In response to these mounting financial pressures, Dunzo has been forced to undertake three rounds of layoffs over the past year, resulting in a reduction of over 500 jobs. These measures, while difficult, have been adopted as cost-cutting measures, while the company awaits the anticipated influx of funds.