Decisions like layoffs are tough and the last option as it impacts people, says Dunzo CEO

Groceries delivery startup Dunzo laid off three percent of its workforce last week. The step was taken as part of cost cutting measures.

Kabeer Biswas, CEO and Co-Founder, Dunzo told CNBC-TV18 that the company is extending the best support possible to help employees during this transition.

“Any decision that impacts people is tough & always our last option,” said Biswas.

Bengaluru-headquartered startup Dunzo reported a net loss of Rs 464 crore in FY22. This showcase a two fold spike from reporting a net loss of Rs 229.1 crore in FY21. According to company’s annual financial reports the rise in operational cost led to the spike in loss.

Dunzo lost Rs 230 on each Dunzo Daily order during the first half of 2022 that is from January to June. EBITDA loss in June was Rs 176 crore.

However Dunzo’s revenue from operations increased over two times to Rs 54.3 crore in FY22.

Biswas told CNBC-TV18 that the company is continuously looking at team structures and network design to build efficiency into the teams and redefine the business process at scale.

“Whatever the numbers, these are people who chose to build their careers with Dunzo, and it is sad to have talented colleagues leave us,” added Biswas.

Last year with the markets turning, existing investors urged quick commerce companies to get on the street of profits, get off the pandemic high-horse and get frugal along with going fast. The first step was to curtail the burn in setting up newer dark stores to get within 2-3 km of a potential customer which ensures quicker deliveries.

Earlier this year, Dunzo founder Kabeer Biswas told CNBC-TV18 that it takes about Rs 70 lakh to Rs 1 crore ($100,000 to $1,25,000) of investment per dark store over a period of four to five months for it to breakeven.

Dunzo opened a micro fulfilment centre every 1.5 days between January and March, 2022. But, recently shuttered some of its dark stores across Delhi NCR and Hyderabad 'in peripheral areas with very low demand to drive operational efficiencies and optimise costs', which led to some layoffs as well.