Alerzo, a Nigerian B2B e-commerce platform that digitizes commerce and payment processes between FMCG suppliers and informal retailers, has laid off 15% of its full-time workforce, the company confirmed to TechCrunch. .
This is the company’s second layoff in seven months. First his party e-commerce his business, Alerzo, has more than 2,000 employees across Nigeria, half of whom were working full-time, before the first layoff last September. ). Alerzo said the first layoffs were performance-related and included digitizing some roles, including developing an in-house ERP. Meanwhile, his second round of layoffs, carried out to boost profitability, affected his 15% of full-time employees in various departments, leaving the startup with about 800 employees. I was. The number of part-time and temporary workers laid off in both layoffs could not be confirmed.
For Alerzo, which serves more than 100,000 retailers, the rationale for the second round of layoffs is not strange. Allerzo hit breakeven in the third quarter of 2021, according to a company spokesperson, but the company, which was only in Ibadan and Lagos at the time, raised a Series A funding round of more than $10 million. , underwent massive expansion and were over-hired nationwide.
The company’s e-commerce business grew 2.3 times (in dollars) in 2022 compared to 2021 due to expansion. And so was the payments division, which the company dug into through its Q4 2021 acquisition. So far, the run rate has recorded ₦200 billion. However, like many other companies, feeling the broader economic impact after experiencing rapid growth in 2020-21, the company is restructuring and cutting staff costs to boost profits. We want to reduce it. Alerzo also believes that the acquisition of the payments license, which will significantly contribute to the digitalization of its merchant base, will further accelerate its path to breakeven and achieve profitability by the third quarter of this year. increase.
Given the previous market dynamics, we have been very aggressive in recruiting over the past few years, driving rapid growth and expansion across the country. This is inconsistent with the current economic environment and, unfortunately, we have had to change our business to focus more on pursuing strong unit economics. Despite these challenges, we remain committed to our mission and are confident that this reorganization will enable us to better serve our customers and pursue sustainable growth. We would like to thank all these employees for their hard work and dedication.
For employees with redundant roles, Allerzo will pay all contractual notice periods, provide an additional month of severance pay, and provide HMO coverage (including eligible family members) through the end of 2023. ) and said it would continue to provide job placement and employment. counseling service.
Allerzo, on the other hand, is one of the few African startups to undergo two layoffs in the past year, including mobility startup SWVL, fintech Chipper Cash and e-commerce startup Sendy. And in what could be a challenging two months for African e-commerce companies, Jumia closed 900 of his positions in 11 markets as part of a streamlining effort in the fourth quarter of last year, leaving his staff at 20% affected.
