Alerzo, a Nigerian B2B e-commerce platform that digitizes commerce and funds processes between FMCG suppliers and casual retailers, has laid off 15% of its full-time workforce, the corporate confirmed to TechCrunch.
That is the corporate’s second spherical of layoffs in seven months. As a first-party e-commerce enterprise, Alerzo had a headcount of greater than 2,000 staff (half of which labored full-time) throughout Nigeria earlier than the primary layoffs final September, which affected 5% of its full-time workforce. In keeping with Alerzo, the primary spherical of layoffs have been performance-related and concerned the digitization of some roles (together with the event of an inner ERP). In the meantime, the second spherical of cuts, executed as a consequence of a profitability push, impacted 15% of its full-time staff throughout varied departments, leaving about 800 staff on the startup. We couldn’t verify what number of part-time and non permanent hires have been let go in each layoffs.
For Alerzo, which serves over 100,000 retailers, the idea for a second layoff isn’t outlandish. In keeping with the corporate’s spokesperson, Alerzo was breakeven in Q3 2021, earlier than the corporate, current in simply Ibadan and Lagos on the time, undertook main growth and overhired nationwide, buoyed by its $10 million+ Sequence A financing spherical.
The corporate’s e-commerce enterprise grew 2.3x (in greenback phrases) in 2022 in comparison with 2021 because of the growth. And so did its funds arm, which the corporate delved into by way of an acquisition in This autumn 2021; up to now, it has recorded a ₦200 billion run charge. Nevertheless, the corporate, feeling the impression of the broader economic system after having fun with fast progress in 2020-21, like many others, desires to restructure and in the reduction of payroll as a way to increase earnings. Alerzo additionally thinks that with the fee licenses it has obtained, which is able to considerably contribute to the digitization of its service provider base, it might probably pace up its path to breakeven extra rapidly and attain profitability by Q3 this 12 months.
Given earlier market dynamics, we employed very aggressively in the course of the previous couple of years to gasoline fast progress and growth throughout the nation. This doesn’t align now with the financial atmosphere right now, so we, sadly, needed to make modifications to our enterprise to be extra centered round pursuing sturdy unit economics. Regardless of these challenges, we stay dedicated to our mission and are assured that this restructuring will allow us to raised serve our clients and pursue sustainable progress. We’re grateful for the laborious work and dedication of all of those staff.
For workers who’ve seen their roles develop into redundant, Alerzo stated it would pay out all contractual discover durations, present an extra one-month severance, proceed HMO protection (together with for coated members of the family) till the top of 2023, and supply job placement and counseling companies.
In the meantime, Alerzo is considered one of a handful of African startups to have carried out two rounds of layoffs over the previous 12 months, together with mobility startup SWVL, fintech Chipper Money and e-commerce startup Sendy. Additionally, in what might be described as a making an attempt couple of months for African e-commerce outfits, Jumia, as a part of its streamlining efforts in This autumn final 12 months, terminated 900 positions throughout its 11 markets, affecting 20% of its employees.