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 payment processes between FMCG vendors and informal retailers, has laid off 15% of its full-time workforce, the company confirmed to TechCrunch.

This is the company’s second round of layoffs in seven months. As a proprietary e-commerce company, Alerzo had more than 2,000 employees (half of whom worked full-time) across Nigeria before the first layoffs last September, which affected 5% of its full-time workforce. According to Alerzo, the first round of layoffs was performance-related and involved the digitization of certain roles (including the development of an internal ERP). Meanwhile, the second round of cuts, executed due to a surge in profitability, affected 15% of its full-time employees in various departments, leaving around 800 employees at startup. We could not confirm how many part-time and temporary hires were laid off during the two layoffs.

For Alerzo, which serves more than 100,000 retailers, the basis for a second layoff is not far-fetched. According to the company’s spokesperson, Alerzo broke even in the third quarter of 2021, before the company, which had operations only in Ibadan and Lagos at the time, undertook a major expansion and was hired on the job. nationwide, backed by its $10 million+ Series A funding round.

The company’s e-commerce business grew 2.3x (in dollars) in 2022 compared to 2021 due to expansion. So did its payments arm, which the company leaned into via an acquisition in Q4 2021; so far, it has recorded an execution rate of ₦200 billion. However, the company, which is feeling the impact of the wider economy after experiencing rapid growth in 2020-21, like many others, wants to restructure and reduce its payroll in order to boost its profits. Alerzo also believes that with the payment licenses it has received, which will significantly contribute to the digitization of its merchant base, it can accelerate its path to breakeven faster and reach profitability by the third quarter of this year.

Given past market dynamics, we have been hiring very aggressively over the past two years to fuel rapid growth and expansion across the country. This is not in line with the current economic environment, so unfortunately we have had to make changes to our business to focus more on pursuing a strong unit economy. Despite these challenges, we remain committed to our mission and are convinced that this restructuring will enable us to better serve our customers and pursue sustainable growth. We are grateful for the hard work and dedication of all these employees.

For employees who have seen their duties become redundant, Alerzo said it will pay all contractual notice periods, provide an additional month’s severance, continue HMO coverage (including for covered family members) until ‘at the end of 2023, and would provide job placement and advisory services.

Meanwhile, Alerzo is one of the few African startups to have made two rounds of layoffs in the past year, including mobility startup SWVL, fintech Chipper Cash and e-commerce startup Sendy. Additionally, in what can be described as a trying few months for African e-commerce businesses, Jumia, as part of its streamlining efforts in the fourth quarter of last year, cut 900 positions across its 11 markets. , affecting 20% ​​of its staff.