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 line with Alerzo, the layoffs had been performance-related and concerned the digitization of some roles. In the meantime, the second spherical of cuts, executed because of a profitability push, impacted 15% of its full-time staff throughout numerous departments, leaving about 800 remaining on the startup. We couldn’t verify what number of part-time and short-term hires had been let go in each layoffs.
Alerzo, which serves over 100,000 retailers, claims that the premise for a second layoff isn’t outlandish. In line 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 enlargement and overhired nationwide, buoyed by its $10 million+ Sequence A financing spherical.
The corporate’s e-commerce enterprise grew 2.3x in 2022 in comparison with 2021 because of the enlargement. And so did its funds arm, which the corporate delved into by way of an acquisition in This fall 2021; thus far, it has recorded a ₦200 billion run charge. Nevertheless, the corporate, feeling the impression of the broader economic system after having fun with speedy progress in 2020-21, like many others, desires to restructure and in the reduction of payroll with the intention 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 may pace up its path to breakeven extra rapidly and attain profitability by Q3 this 12 months.
Given earlier market dynamics, we employed very aggressively throughout the previous couple of years to gas fast progress and enlargement throughout the nation. This doesn’t align now with the financial atmosphere at present, so we, sadly, needed to make adjustments to our enterprise to be extra targeted 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 higher serve our clients and pursue sustainable progress. We’re grateful for the onerous work and dedication of all of those staff.
For affected staff who’ve seen their roles change into redundant., Alerzo stated it is going to pay out all contractual discover durations, present an extra one-month severance, proceed HMO protection (together with for coated relations) till the tip of 2023, and supply job placement and counseling providers.
In the meantime, Alerzo is certainly one of a handful of African startups to have carried out two rounds of layoffs over the previous 12 months, together with fintech Chipper Money and e-commerce startup Sendy. Additionally, in what will 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 fall final 12 months, terminated 900 positions throughout its 11 markets, affecting 20% of its workers.