Cash-strapped Dunzo, a quick commerce start-up, is now confronted with an additional obstacle. Off-roll employees at the company’s dark stores in Bengaluru have ceased operations following a delay in receiving their July salaries, sources reveal.
The issue began to simmer at the beginning of the week when a number of off-roll workers in the city suspended their tasks, insisting on receiving their salaries for the month of July.
Mainly responsible for packing groceries and delivering them to assigned partners in Dunzo Daily service, the off-roll employees play a key role in the process.
“There have been nearly 70 off-roll employees of the dark stores whose salaries have also not been released,” said one of the sources on the condition of anonymity.
“We have built a hybrid network of stores for Dunzo Daily, which is a combination of dark stores and partner stores. This network is dynamic and continues to evolve. Where it makes business sense for us to have partner stores, we will switch to that model. We are live in more than 95 per cent of our geos in Bengaluru, except in a couple of areas where we are transitioning to partner stores. We should be operational in these areas soon,” said a Dunzo spokesperson.
The company, headquartered in Bengaluru, now operates dark stores in just a few locations, all within its home market of Bengaluru. This number has significantly decreased from its previous count of around 250 stores spread across the nation.
“Dunzo had nearly 250 stores all over the country, but right now it has come down to single digits,” said another source.
This development arises amidst the financial challenges confronting the quick-commerce entity, which has implemented cost-cutting measures including the layoff of approximately 300 employees.
Read More: Dunzo downsizes workforce by 30% to cut costs as it secures $75 million in convertible note funding
In the previous month, SnackFax had disclosed that the company had postponed salary payments for both its current and former employees until September 4. Additionally, the company has shifted its focus from business-to-consumer to business-to-business operations, with the introduction of Dunzo for Business.
Also Read: Dunzo4Business to extend operations, eyes entry into 10-15 new cities in the coming months
In its most recent funding round, Dunzo secured $75 million through convertible notes, with participation from its current investors, Google and Reliance Retail.
According to market intelligence firm Tracxn, Reliance Retail, the company’s largest shareholder, possesses approximately 25.56 percent ownership, while Google holds around 18.53 percent of the shares.
As of May 2022, Dunzo held a valuation of $757 million and has accumulated $497 million in equity investments up to the present, according to data from Tracxn.