Alerzo, a Nigerian B2B e-commerce platform that digitizes business and payment processes between FMCG suppliers and informal retailers, has cut 15% of its full-time workforce, the company confirmed to TechCrush.
It is the second round of layoffs the company has conducted in seven months. As a first-party e-commerce business, Alrzo had a headcount of more than 2,000 employees (half of them full-time) in Nigeria before its layoffs last September, touching 5% of its full-time workforce. According to Alrzo, the first round of layoffs was performance-related and included the digitization of some roles. Meanwhile, the second round, driven by a push for profitability, has affected 15 percent of its full-time workforce in various departments, leaving about 800 at the startup. We were unable to confirm how many part-time and temporary employees were let go in either layoff.
For Alerzo, which serves more than 100,000 retailers, the foundation is no stranger to a second layoff. According to a company spokesperson, Alrzo broke ground in Q3 2021, before the company, which was then based in Ibadan and Lagos, underwent a major expansion and acquired Nationwide for $10 million+ in Series A financing.
The company’s e-commerce business is expected to grow 2.3x (in dollars) in 2022 compared to 2021. And so does the company’s payments arm, which it acquired in Q4 2021. It has recorded a run rate of $200 billion so far. However, the company, like many others, is feeling the effects of the broader economy after experiencing rapid growth in 2020-21 and is looking to restructure and cut wages to boost profits. Alrzo thinks it will contribute significantly to the digitalization of the merchant base with the payment licenses received.
Given past market dynamics, we’ve hired very aggressively over the past two years to drive rapid growth and expansion across the country. This is not compatible with the current economic situation, so we, unfortunately, had to make changes in our business to focus more on pursuing strong unit economics. Despite these challenges, we remain committed to our mission and are confident that this restructuring will enable us to better serve our customers and sustain sustainable growth. Thank you to all of these employees for their hard work and dedication.
For employees who saw their job cuts, Alerzo said it will pay all notice periods, provide an additional month of severance, continue HMO coverage (including covered family members) through the end of 2023, and offer job placement. and counseling services.
Meanwhile, Alrzo is one of a handful of African startups that have undergone two rounds of layoffs in the past year, including fintech Chipper Cash and e-commerce startup Sandy. Also, in what could be described as an experimental two months for the African e-commerce outfit, Jumia cut 900 positions across its 11 markets as part of its restructuring efforts in Q4 last year, affecting 20% of its workforce.
