Alerzo, a Nigerian B2B e-commerce platform that digitizes business and payment procedures between FMCG suppliers and unofficial merchants, has laid off 15% of its employees.
In the past seven months, the corporation has made two rounds of layoffs. Before the initial layoffs in September, which affected 5% of its full-time personnel, Alerzo had a headcount of more than 2,000 people (half of whom worked full-time) across Nigeria.
Alerzo claims that the initial round of layoffs involved some roles being digitalized and were performance-related (including the development of an internal ERP).
In the meantime, 15% of its full-time staff across all departments were affected by the second round of cuts, which were implemented in an effort to increase profitability, leaving roughly 800 personnel.
The likelihood of a second layoff for Alerzo, which provides services to over 100,000 shops, is not improbable.
The business’s spokesman claims that Alerzo reached breakeven in Q3 2021 before embarking on a big expansion and hiring excessively across the country, supported by its $10 million+ Series A financing round. At the time, the company was only present in Ibadan and Lagos.
Due to the growth, the company’s e-commerce business increased by 2.3 times (in dollars) in 2022 compared to 2021.
And so did its payments division, which the corporation entered through an acquisition in Q4 2021 and has so far generated a run rate of $200 billion. Yet, the business, suffering the effects of the overall economy after seeing strong expansion in 2020–21, intends to restructure and reduce payroll in the near future.
Alerzo also believes that by utilizing the payment licenses it has been granted, which will considerably aid in the digitization of its merchant base, it will be able to accelerate its road to profitability by the third quarter of this year and break even sooner.
Alerzo announced that it will pay out all contractual notice periods, give an extra one-month severance to workers whose responsibilities have been eliminated, maintain HMO coverage (including for covered family members) through the end of 2023, and offer job placement and counseling services.