Nigerian e-commerce startup Alerzo sacks another 400 staff

A Nigerian technology platform that caters to retail stores, has laid off at least 400 people which represented 15 percent of its workforce.

This is the second layoff in the last seven months as the company had relieved five percent of its staff in September 2022.

At the time of the first layoffs, the company said, “Due to this increased digitization, some roles that were previously required no longer are necessary, specifically for our internal warehouse operations.”  

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As part of the new round of layoffs, Alerzo is reportedly reducing its business footprint and will now close 14 warehouses across the country.

This year’s layoffs happened in the first week of March 2023. On Glassdoor, anonymous employees wrote about poor company culture, a lack of structure and an absence of work-life balance.

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One review stated, “Alerzo will fire you anytime they want.” In contrast, another review titled “termination” noted that one con of working with the company is “you can’t relax while working with Alerzo,” a reference to job insecurity.

While three sources said that at least 600 people were fired, Alerzo reportedly stated that 15% of full-time staff (150-200 full-time employees) were affected, while 150-200 part-time employees were fired. The company said it could not provide an exact number at the time of our conversation.

Two sources revealed that 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.

Alerzo told employees that difficult macroeconomic conditions necessitated the layoffs. It also cited post-election uncertainties and a need to improve its unit economics. 

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.

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It was gathered from two sources that the general feeling was that the severance package was unimpressive. But Alerzo claimed that “most employees will receive two months salary as part of their severance package but this was not communicated to them because of some considerations.”

One of the reasons Alerzo gave for last week’s layoffs was post-election uncertainty. The company said that while it was prepared for a slowdown in business due to the elections, currency scarcity was a double whammy.

“A lot of suppliers and customers are feeling the pain of the cashless situation and the election slowdown, 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.” 

When the company raised money in September 2021, it began an expansion that saw it increase its spending. The company says it had broken even before it raised money and that its assumptions in 2021 are different from today.

The company said on a phone call, “These changes are tough and unfortunate, but we now have the opportunity to reorient and get to profitability quickly. We have a payments business that’s growing very fast, we’ve gotten a banking licence and a PSS licence and we’re in the process of launching 3 different products.”

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