Nigerian B2B e-commerce platform, Alerzo, has laid off 400 employees, representing 15% of its full-time workforce.
This came as the second layoff in the last 7 months as the company had cut 5% of its staff in September last year.
Citing sources within the company, TechCabal reported that Alerzo is also reducing its business footprint and will now close 14 warehouses across the country as part of the new round of layoffs.
More details about this: According to Alerzo, the first round of layoffs was performance-related and involved the digitization of some roles (including the development of an internal ERP).
However, for the latest layoffs, the company told employees that difficult macroeconomic conditions necessitated the action. It also cited post-election uncertainties and a need to improve its unit economics.
Email to employees: Two sources disclosed that the affected employees got termination emails at around 6 p.m. on March 1 and were promptly logged out of work tools. On Saturday, more employees also received termination emails.
Both sources also confirmed that, unlike the first round of layoffs which affected mainly warehouse staff, this was broader, with the company’s head of communications reportedly affected as well.
Part of the email also said that employees would be paid one month’s salary as part of their severance package.
The company also told employees that their HMO packages will remain active until the year’s end and offered assistance with job placement.
Buoyed by fundraising: Alerzo had announced that it broke even in Q3 2021, which was before it raised its $10.5 million Series A financing round. After the round, the company undertook major expansion and hired more hands nationwide. The company’s e-commerce business grew significantly in 2022 compared to 2021 due to the expansion. And so did its payments arm, which the company delved into via an acquisition in Q4 2021.
However, Alerzo is now feeling the impact of the broader economy and wants to reduce its size and cut payroll. Blaming post-election uncertainty as one of the reasons for the latest layoffs, the company said that while it was prepared for a slowdown in business due to the elections, currency scarcity worsened the situation.
- “A lot of suppliers and customers are feeling the pain of the cashless situation and the election slow down, so we had to put the business on a path to profitability. We want to be in a place where we can control unit economics more closely and we believe that we have the headcount to do so,” the company said.