B2B E-Commerce Startup Alerzo LayOff 15% of Its Workforce

B2B e-commerce retail startup based in Ibadan, Nigeria, Alerzo has laid off 15% of its workforce.

This is the startup’s second round of layoff in seven months after it laid off hundreds of employees in August and September 2022. According to Alerzo, the first round of layoffs was performance-related which involved digitizing some roles, including developing an internal ERP.

The recent round of layoffs carried out was due to a profitability push, impacting 15% of its full-time employees across various departments, which saw at least 400 people impacted. Also, one of the reasons Alerzo gave for its recent layoffs was post-election uncertainty.

The company stated that while it was prepared for a slowdown in business due to the elections, currency scarcity presented a twofold blow.

The company said in a statement, “Given previous market dynamics, we hired very aggressively during the past couple of years to fuel quick growth and expansion across the country. This does not align now with the economic environment today, so we, unfortunately, had to make changes to our business to be more focused on pursuing strong unit economics.

“Despite these challenges, we remain committed to our mission and are confident 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 of these employees.”

The startup further stated that it will pay out all contractual notice periods and provide additional severance, counseling services, and HMO coverage until the end of 2023 for affected employees. Currently, Alerzo says it wants to restructure and reduce payroll to increase profits.

As part of the new round of layoffs, the startup is reportedly reducing its business footprint and will now close 14 warehouses across the country. The startup believes it can accelerate its path to break even more quickly and reach profitability by the third quarter (Q3) this year, with the help of the payment licenses it has acquired, which will significantly aid the digitization of its merchant base, Investors King understands.

Alerzo is one of the innovative Business-to-Business e-commerce platforms deploying technology to reinvent the distribution value chain in the informal retail sector. In 2022, the company’s CEO Adewale Opaleye disclosed that the startup has improved the business fortune of over 80,000 informal retailers across the country.