Cash-strapped hyperlocal delivery startup Dunzo has allegedly postponed the disbursement of overdue salaries to its employees for an additional four months.
According to Moneycontrol, Dunzo communicated through an internal email to its workforce that it plans to settle any outstanding payments, including salaries for June and July, during the period of January-February 2024.
Former employees who parted ways with the company recently will also be receiving their full and final payments in January or February of the upcoming year.
Dunzo has a history of extending the deadline for pending salary payments, and this recent extension is not the first. Initially, the company was set to disburse a portion of the June salaries to its employees by July 20, but this deadline was later pushed to early September. Subsequently, the company extended the deadline once more, this time to the first week of October.
Despite the recent four-month delay in salary payments, Dunzo maintains its commitment to provide an annual interest rate of 12% on the service period.
An email inquiry sent to Dunzo inquiring about confirmation of this development remained unanswered at the time this story was published.
“We are working towards ensuring all pending salaries are paid at the earliest. However, we regret to inform you that given the present business situation, the revised timelines by which we will clear pending dues, including salaries for the months of June and July, if any, in January – February 2024,” as per Dunzo’s email to its former employees.
“Additionally, all other remaining payments, which include August/September salary for days served will be paid out by January-February 2024 as part of your F&F,” the email said.
It’s worth highlighting that the salary payment delay coincides with Dunzo’s significant management reshuffling amidst a challenging financial situation. Two of its Co-Founders, Dalvir Suri and Mukund Jha, are leaving the startup.
Additionally, several board members of Dunzo have recently resigned. Among them are Vaidhehi Ravindran from Lightrock, as well as Rajendra Kamath and Ashwin Khasgiwala from Reliance Retail.
Dunzo is currently facing legal notices from a minimum of seven companies, including Google, Facebook, Nilenso, Clover Ventures, among others, regarding unpaid dues.
Amidst the escalating challenges, Dunzo had been seeking to secure $100 million in its Series G funding round from its current investors, such as Lightbox and Lightrock. Nevertheless, a disagreement regarding the company’s valuation has put a halt to these fundraising efforts.
Dunzo’s net loss surged to INR 464 crore in the fiscal year 2022, marking a twofold increase.
In the midst of the ongoing crisis, the Bengaluru-based startup has let go of approximately 400 employees since the previous year. Just last month, Dunzo’s CEO, Kabeer Biswas, also cautioned the company’s employees about the potential for additional layoffs.