Dunzo moves employees from Google Workspace to Zoho to bring down costs

Trimming costs is a crucial step for Dunzo, which has been struggling to stay afloat since July due to cash flow issues.

In yet another move to lower costs, quick commerce startup Dunzo has migrated all employee accounts to Zoho workplace from Google. This is expected to bring down costs by at least a third for the embattled company.

Trimming costs is a crucial step for Dunzo, which has been struggling to stay afloat  since July due to cash flow issues. Since then the startup has had to delay salaries, fire over 500 staffers, give up its office space in Bengaluru, amid other measures to steady ship.

Google Workspace – which encompasses Gmail, Meet, Sites, Calendar, AppSheet and many more applications – is crucial for employees since it synchronises their schedules and also creates a database which contains all company-related information.

“Dunzo's Google Workspace access (email, calendars, drive etc) was revoked overnight due to nonpayment to the cloud consultant,” a person in the know said.

“People lost their email history – external emails, ongoing conversations with vendors, all of it. Planning documents, which contained quarterly plans, sprint plans and the rest, that were saved on Google Drive were all lost,” the person added.

The company confirmed the developments to Moneycontrol. "This migration is just a regular business decision. There were some initial teething issues for the first couple of days, but all of these have been ironed out now," the company spokesperson said.

As a result of the migration to Zoho, the email ID for everyone at Dunzo has changed from a .in extension to a .com extension.

Google, also one of Dunzo’s largest investors, charges at least Rs 1,600 per user per month for its suite of offerings (Workspace) under the enterprise plan but Zoho charges only Rs 489 for the same arrangement, as per the company website.

The move to Zoho, the homegrown software company, also comes at a time when Dunzo has been downsizing its workforce as it prepares to be much smaller in scale. From over 1,300 employees in March, the company is now aiming to have a workforce that will not exceed 200 in total.

Dunzo’s move to scale down operations comes at a time when its net loss ballooned to Rs 1,802 crore in FY23, a 288 percent increase from the previous year. The mounting losses also prompted Deloitte, the company’s auditor, to cast doubts over Dunzo’s ability to continue as a going concern, as reported earlier.

That was after raising close to $500 million since 2015 from Reliance Retail, Google, Lightrock, Lightbox, Blume Ventures and several others. Reliance is the largest shareholder with a 25.8 percent stake in the company, and Google was the second-largest with around 19 percent ownership in Dunzo, according to Tracxn, a private markets data provider.

Disclaimer: Moneycontrol is a part of the Network18 group. Network18 is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.