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 primary spherical of layoffs had 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 numerous departments, leaving about 800 staff on the startup. We couldn’t affirm what number of part-time and non permanent hires had been let go in each layoffs.
For Alerzo, which serves over 100,000 retailers, 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+ Collection A financing spherical.
The corporate’s e-commerce enterprise grew 2.3x (in greenback phrases) in 2022 in comparison with 2021 as a result of enlargement. And so did its funds arm, which the corporate delved into through an acquisition in This autumn 2021; to date, it has recorded a ₦200 billion run charge. Nevertheless, the corporate, feeling the influence of the broader financial system after having fun with speedy development in 2020-21, like many others, desires to restructure and in the reduction of payroll so as to increase earnings. Alerzo additionally thinks that with the cost licenses it has acquired, which is able to considerably contribute to the digitization of its service provider base, it will possibly pace up its path to breakeven extra shortly and attain profitability by Q3 this yr.
Given earlier market dynamics, we employed very aggressively throughout the previous couple of years to gasoline fast development and enlargement throughout the nation. This doesn’t align now with the financial setting as we speak, so we, sadly, needed to make adjustments 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 development. We’re grateful for the laborious work and dedication of all of those staff.
For workers who’ve seen their roles turn out to be redundant, Alerzo stated it is going to pay out all contractual discover durations, present a further one-month severance, proceed HMO protection (together with for coated members of the family) till the tip of 2023, and supply job placement and counseling companies.
In the meantime, Alerzo is one among a handful of African startups to have performed two rounds of layoffs over the previous yr, together with mobility startup SWVL, fintech Chipper Money and e-commerce startup Sendy. Additionally, in what could be described as a attempting couple of months for African e-commerce outfits, Jumia, as a part of its streamlining efforts in This autumn final yr, terminated 900 positions throughout its 11 markets, affecting 20% of its workers.
