A Nigerian B2B e-commerce platform, Alerzo, has confirmed that it has laid off 15% of its full-time workforce, marking the company’s second round of layoffs in seven months. Alerzo digitizes commerce and payments processes between FMCG suppliers and informal retailers, serving over 100,000 retailers. The layoffs were performance-related and involved the digitization of some roles. The company was breakeven in Q3 2021 before undertaking major expansion and overhiring nationwide, buoyed by its $10 million+ Series A financing round. Alerzo’s e-commerce business grew 2.3x in 2022 compared to 2021 due to the expansion. Its payments arm, which the company delved into via an acquisition in Q4 2021, has recorded a ₦200 billion run rate. However, the company wants to restructure and cut back payroll to boost profits. Alerzo also thinks that with the payment licenses it has received, it can speed up its path to breakeven more quickly and reach profitability by Q3 this year. Alerzo is one of a handful of African startups to have conducted two rounds of layoffs over the past year, including fintech Chipper Cash and e-commerce startup Sendy. Jumia, as part of its streamlining efforts in Q4 last year, terminated 900 positions across its 11 markets, affecting 20% of its staff. Alerzo will pay out all contractual notice periods, provide an additional one-month severance, continue HMO coverage (including for covered family members) until the end of 2023, and provide job placement and counseling services for affected employees.
Nigeria’s B2B e-commerce industry was sent reeling by the recent news of Alerzo’s second round of layoffs. The company, which had been a significant player in the sector, sent shockwaves through the industry with its decision to downsize its operations.
Alerzo, an online platform that connects buyers and sellers in the Nigerian B2B marketplace, had already cut staff numbers earlier this year as a result of financial difficulties. However, the decision to layoff even more workers has created uncertainty and concern among industry insiders.
The effects of the layoffs are expected to be far-reaching. Many businesses in the B2B sector rely on Alerzo’s platform for their day-to-day operations. With the company’s downsizing, it’s unclear how these businesses will continue to function in the absence of a reliable, widely used platform.
Additionally, the layoffs are likely to have a ripple effect throughout the wider Nigerian economy. B2B e-commerce has been an important sector for Nigeria’s economic growth, providing opportunities for businesses to expand both domestically and internationally. Alerzo’s decision to let go of staff and downsize its operations could have a detrimental impact on the industry as a whole.
The news of the layoffs has been met with disappointment and alarm among many industry observers. Some have questioned whether Alerzo’s management acted quickly enough to address the company’s financial difficulties and whether there were alternative measures that could have been taken to avoid the need for layoffs.
There is also concern over the broader implications of the layoffs for Nigeria’s startup ecosystem. Alerzo was one of the most promising startups in the country, and its recent difficulties may cause investors to think twice before pouring money into other Nigerian startups.
Despite the uncertainty created by the layoffs, the Nigerian B2B e-commerce industry is likely to weather the storm. Many businesses have already started to look for alternative platforms to conduct their operations, and new players are emerging to fill the gap left by Alerzo.
In conclusion, Alerzo’s decision to downsize its operations has sent shockwaves through the Nigerian B2B e-commerce industry. The layoffs have created uncertainty and concern over the future of the industry, and their broader implications for the Nigerian economy and startup ecosystem. Nevertheless, the industry is expected to continue growing and evolving, driven by the creativity and innovation of its many players.