Nigerian B2B e-commerce startup Alerzo cuts 15% of full-time staff in second round of layoffs

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 ClassyBuzz.

That is the corporate’s second round of layoffs in seven months. As a first-party e-commerce enterprise, Alerzo had a headcount of greater than 2,000 workers (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 round of layoffs have been performance-related and concerned the digitization of some roles (together with the event of an inside ERP). In the meantime, the second round of cuts, executed because of a profitability push, impacted 15% of its full-time workers throughout numerous departments, leaving about 800 workers 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 premise 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 enlargement and overhired nationwide, buoyed by its $10 million+ Collection A financing round.

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 via an acquisition in This fall 2021; to this point, it has recorded a ₦200 billion run charge. Nevertheless, the corporate, feeling the affect of the broader economic system after having fun with fast development in 2020-21, like many others, needs to restructure and in the reduction of payroll in order to spice up income. Alerzo additionally thinks that with the cost licenses it has obtained, which can 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 12 months.

Given earlier market dynamics, we employed very aggressively in the course of the previous couple of years to gas fast development and enlargement throughout the nation. This doesn’t align now with the financial setting immediately, 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 higher serve our clients and pursue sustainable development. We’re grateful for the onerous work and dedication of all of these workers.

For workers who’ve seen their roles develop into redundant, Alerzo mentioned it is going to pay out all contractual discover durations, present a further one-month severance, proceed HMO protection (together with for lined relations) till the tip of 2023, and supply job placement and counseling companies.

In the meantime, Alerzo is 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 may be described as a making an attempt couple of months for African e-commerce outfits, Jumia, as half of its streamlining efforts in This fall final 12 months, terminated 900 positions throughout its 11 markets, affecting 20% of its staff.

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