Quick commerce platform Dunzo went through another round of layoffs within three months, firing 30% of its employees in preparation for a business model shift. According to reports, around 300 employees are affected.
Dunzo’s platform connects its customers with nearby stores and vendors to enable online deliveries of groceries, medications, and other everyday items.
In addition, the Reliance Retail-backed quick commerce startup secured $75 million in convertible notes. According to an ET report, Google and Reliance Retail will contribute $50 million, with the remainder coming from existing investors.
According to the publication, Dunzo founder and CEO Kabeer Biswas informed employees about the layoffs during a town hall meeting on Wednesday (5 April), as well as the business model change.
Following the layoffs, the quick commerce startup will close 50% of its dark stores and operate only those that can be profitable or are on their way to becoming profitable in the near future. Dunzo will also work with supermarkets and other merchants wherever it closes down dark stores.
Biswas told employees at the town hall that the unicorn needed to make this decision to ensure profitability within the next 18 months. According to sources cited by ET, while the money from the convertible notes has already arrived, Dunzo would need 36 months to become profitable without laying off employees.
The quick commerce bubble in India has popped, with incumbents realising that creating an operationally profitable quick commerce business model in the current macroeconomic environment is difficult. Swiggy Instamart, Zepto, and other competitors have also cut costs and made operational changes.