TechPression

Tag: Layoff

  • Nigeria’s Retail-startup, Alerzo lays off 400 people

    Nigeria’s Retail-startup, Alerzo lays off 400 people

    At least 400 employees at Alerzo, Nigeria’s most popular B2B e-commerce platform, have been laid off, which is about 15% of the company’s total staff. Reductions in the workforce occurred during the first week of March 2023.

    Yet, staff members who wished to remain anonymous grumbled about the company’s hostile culture, lack of structure, and lack of work-life balance. Another anonymous source claims that on March 1, at about 6 p.m., impacted workers received termination emails and were immediately locked out of all company-issued software. Other workers started getting termination emails on Saturday.

    The anonymous sources also acknowledged that this wave of layoffs was more extensive than the previous one in 2022, which largely impacted warehouse workers, with the company’s head of communications apparently among those cut-off. The firm said the layoffs were necessary owing to severe setbacks due to macroeconomic circumstances, post-election uncertainty, and the need to strengthen its unit economics.

    Read also: GitHub to implement remote work policy, 10% layoffs

    Also, sources also revealed that severance packages would include one month’s compensation for departing workers. In addition to helping them find new employment, the firm assured them that their HMO coverage would be maintained until the end of the year. According to our two reliable sources, the severance payment was widely seen to be disappointing. “most workers will get two months to pay as part of their severance package, but this was not conveyed to them due to various reasons,” Alerzo said.

    Moreover, the firm said that, although it was expecting a downturn in business owing to the elections, cash shortages were a double whammy that may have impacted business. According to Alerzo, “many suppliers and customers are experiencing the distress of the cashless scenario and the election slow down, so we had to set the firm on a route to profitability. We’d want to be in a position where we have tighter control over unit economics, and we think we have the resources to get there.

    After the layoff raid in early September 2022, this is the second wave of layoffs in the span of seven months for the firm. First-party e-commerce company Alerzo had over 2,000 workers (half of whom were full-time) in Nigeria before the first round of layoffs in September of last year.

    Reasons for Alerzo’s layoffs 

    Alerzo claims that the first wave of layoffs was caused by poor performance and the automation of some tasks (including the development of an internal ERP). However, the company’s second wave of layoffs, carried out in response to a drive to increase profitability, affected 15% of full-time workers across a wide range of divisions, reducing headcount to about 800. However, the precise number of casual and temporary employees who lost their jobs is yet uncertain.

    For Alerzo, which serves over 100,000 retailers, the basis for a second layoff isn’t outlandish. A representative for the firm claims that Alerzo ran into significant difficulties in the third quarter of 2021, long before the company raised over $10 million in Series A funding and entered the marketplaces of Ibadan and Lagos concurrently.

    Alerzo, like other African businesses, including mobility firm SWVL, a financial technology startup Chipper Cash, and e-commerce startup Sendy, has laid off employees twice in the last year. In addition, as part of its restructuring efforts in Q4 of last year, Jumia let off 900 employees across its 11 regions, or 20% of its total workforce, in what can be regarded as a tough couple of months for African e-commerce businesses.

  • Microsoft to invest in AI, cutting over 10,000 jobs

    Microsoft to invest in AI, cutting over 10,000 jobs

    Microsoft is considering a multi-billion-dollar investment in artificial intelligence company OpenAI, the maker of ChatGPT (Generative Pre-trained Transformer), as it cuts down 10,000 jobs in the latest round of staff layoff

    Microsoft chief executive Satya Nadella, breaking the news in a memo to staff,  said that while customer spending had grown during Covid, more people were now choosing to “exercise caution”.

    According to him, many parts of the world were in a recession or anticipating one, while “at the same time, the next major wave of computing is being born, with advances in AI”.

    He, however, said the firm would continue to hire in key areas.

    Read also: OpenAI, Microsoft to challenge Google with ChatGPT-powered Bing

    The layoff will affect 5% of its global staff

     Microsoft’s layoff will affect up to 5% of its global workforce and cost the business $1.2bn (£972m) in severance and reorganisation costs.

    According to reports, Microsoft is considering a $10bn investment in the company behind ChatGPT, the chatbot that’s not only captivated the millions of people who have tried it out but is also predicted by some experts to be the future of search.

    How Microsoft Layoffs Affect the Company And Investors

    According to Forbes, Microsoft’s stock price fell after the announcement of 10,000 layoffs,  following the market’s downward trend for the day. This isn’t surprising since the day saw many companies lose value. Plus, Microsoft admitted that the layoffs would cost the business about $1.2 billion in severance and other costs.

    The question that investors need to consider is where Microsoft goes from here. Cutting 10,000 jobs, equal to about 5% of its workforce, gives Microsoft significant savings on wages and benefits. If it succeeds at cutting staff that work on less profitable products and focusing its efforts on areas of growth, this could be a strong purchase opportunity for investors.

    On the other hand, this could be the first sign of a continued downward trend for the company. Though many tech firms have reduced their headcount recently, major competitor Apple has yet to announce layoffs. Microsoft also faces stiff competition in areas like cloud technology, which could be challenging to overcome.

    Other tech layoffs

    Hundreds of tech firms, including some of the sector’s biggest names like Amazon and Instagram-owner Meta, have revealed lay-offs in recent weeks.

    At the start of this year, Amazon announced that it planned to cut more than 18,000 jobs because of “the uncertain economy” and rapid hiring during the pandemic.

    In November, Meta announced that it would cut 13% of its workforce, a total of 11,000 employees.

    Jason Wong, a tech industry analyst with consultants Gartner, warned against assuming redundancies in “enterprise” businesses like Microsoft and Amazon happened for the same reasons as the cuts by big social media firms, some of which had faced additional challenges because of “where they intend to take the business”.

    In the case of Twitter, that was moving to “a model away from pure advertising”, and for Facebook, he pointed to its pursuit of the metaverse.

    Microsoft Set To Train 5 Million Nigerian Youths On ICT

    Why tech companies are forced to make cuts

    There are many reasons that tech companies have been forced to make cuts, including rising interest rates. Technology companies are often viewed as volatile and reliant on borrowed money or other influxes of capital. Some, like Uber, have yet to turn a significant profit at all.

    With rates rising, investors have more appealing options that are less risky than tech firms.

    Experts also believe that tech companies over-expanded during the pandemic as people became more reliant on technology to accomplish tasks. As pandemic fears have receded and businesses reopened, tech payrolls are higher than they need to be to keep operations running.

    Pandemic boom

    Like other tech companies that boomed during the pandemic, Microsoft’s workforce grew by roughly 40,000 between June 2021 and June 2022, when it reported having about 221,000 full-time employees, including 99,000 outside the US.

    Microsoft’s business boomed during the pandemic, fuelled by the increase in remote work and other online activity.

    As business slowed last year, the firm embarked on a series of job cuts.

    The latest 10,000 are expected to be completed by the end of the third quarter of 2023.

    The memo said some staff would be notified immediately.

    More than 1,000 tech companies laid off 154,336 employees in 2022 alone, according to Layoffs.fyi which tracks redundancies.

    This year, including the latest Microsoft losses, the site says 26,061 tech sector employees have already been made redundant.

  • Kenyan startup Sendy lays off 20% of its staff, shuts down product

    Kenyan startup Sendy lays off 20% of its staff, shuts down product

    Sendy, a Kenyan company, has stated that it would discontinue one of its products, Sendy Supply, resulting in the termination of 20% of its workforce. This comes less than three months after the business cut off 10% of its workforce due to “global realities hitting technology enterprises.”

    Sendy Supply, a tool that enables merchants to buy merchandise from numerous suppliers and manufacturers, will be suspended while the firm focuses its attention on Sendy Fulfillment.

    Fifty-four individuals lost their jobs when the supply service ceased, the latest casualty of the financing slowdown caused by macroeconomic challenges. Sendy, which now solely serves corporations, hasn’t raised the $100 million it intended, for this year.

    Read also: Sendy, Meta, and Innovation Growth Hub offers free training programs to SMEs

    What is Sendy saying?

    Sendy CEO Meshack Alloys told employees in a teleconference that the company missed its previous quarter’s forecasts and that improvements were required. “If we look at KPIs, we’re moving in the correct path, particularly our contribution margins, gross profits, take rates, and EBIDTA,” said Alloys, who co-founded the firm in 2015 with Evanson Biwott, Don Okoth, and Malaika Judd.

    According to Mesh Alloys, CEO and co-founder of the firm, the new development is part of a larger strategic goal to “consolidate efforts around solutions that touch more consumers.”

    Sendy Transport helps carry tiny items, medium-sized commodities, and huge freight. All these items help the startup expand its enterprise.

    “With the increased penetration of digital commerce and the potential it brings for companies, we’re doubling down on fulfillment to serve online merchants,” Alloys added.

    The company’s newest business model has changed. It was declared two weeks ago that firms would only utilize Sendy Transport. Its three products at the time, Sendy Transport, Sendy Supply, and Sendy Fulfillment, were all business-focused.

    The company’s future strategy is to rapidly grow Sendy Fulfillment, its primary business, through enhancing customer value. It thinks that this combined service offers a big chance for both big and small businesses to solve problems with storage, packing, and last-mile delivery.

    Business closes at Notify Logistics

    Why is the company discontinuing supply?

    While pointing out more reasons why the firm is leaving supply and focusing more on its fulfillment division, Alloys said that Sendy Fulfillment is a core product with a larger addressable market than supply and that, in contrast, to supply, it is not impacted by pricing changes.

    “We are doubling down on fulfillment to support online merchants with the necessary tools to sell and fulfill directly through digital platforms,” he said. “With the growing uptake of digital commerce and recognizing the opportunities it presents for businesses,” he added. We think that digital commerce has a lot of potentials, so Sendy will now focus more on developing fulfillment and delivery services for companies and put more time and money into it.

    While its supply service, which has since been discontinued, made it simple for retailers to buy FMCGs directly from manufacturers, its fulfillment service offered storage, packaging, and delivery of items. Wasoko, Sabi, and TradeDepot are a few businesses that provide these services across Africa.

    This action is a part of Alloys’ larger strategic initiative to concentrate on products that have a greater customer impact and address current and pressing market issues, the company said. Globally, the last several months have been difficult for entrepreneurs. Some companies in Africa have folded, like Kune, or are in danger of doing so, like Sky.Garden. Others, like Wave, have reduced salaries or laid off workers. Even if Sendy may be the first company in Africa to openly declare two rounds of layoffs.