Nigerian startup Alerzo lays off hundreds blaming economy

Alerzo, a Nigerian e-commerce company that connects retailers and their suppliers, has laid off hundreds of employees as the country’s economic conditions squeezes businesses.

The Ibadan-headquartered company which raised nearly $20 million from investors including Nosara Capital, a London-based firm, and FJ Labs in New York, has closed 14 of its 40 warehouses across the country, Semafor and TechCrunch reported. Alerzo’s chief financial officer Harish Venkatesh said the warehouses had been suspended.

– Key points to note

The company cut some 600 jobs in its third round of layoffs in the last one year. Its workforce, full and part-time, reached 2000 before the first job cut in September.

Semafor quoted an email sent to Alerzo staff on March 3 by chief executive Adewale Opaleye who blamed the layoffs on a challenging economic climate in the last year. He said he expects the situation to be worsened by “uncertainty around the post-election landscape.”

“The management team underestimated the challenges facing Nigeria and the global technology market,” Mr Opaleye said. He said after years of hiring too aggressively, it was time to “re-prioritize towards tightening unit economics instead of pursuing growth metrics”.

The company’s known phone contacts did not connect when Pluboard sought comments.

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Alerzo is a business-to-business e-commerce startup and works as an intermediary to help neighbourhood retailers to get supplies from wholesalers. The company is the latest Nigerian startup to cut jobs in recent months.

The Nigerian economy has frustrated many businesses and has destroyed many micro and small enterprises. Businesses have managed high borrowing costs, chronic fuel shortages and high energy costs. An ongoing shortage of naira notes has dealt a devastating blow on businesses too.

Heineken NV, the world’s second largest brewer, said this week it had its worst February in 15 years resulting from the biting cash crunch.