Layoffs in the technology field appeared to have affected more companies than we had anticipated, with a recent report stating that e-commerce platform Jumia reduced its workforce by 20 percent in Q4 2022.
Specifically, and as part of its efforts to streamline operations, Jumia reduced the number of managerial positions by 60% in Dubai and terminated over 900 positions across its 11 markets, which affected the said 20% of its workforce.
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This development is according to Jumia’s FY2022 financials. The Jumia Supervisory Board had previously announced plans to shake up senior management when Francis Dufay was appointed as acting CEO in November of last year.
Dufay mentioned that Jumia had already begun making these changes, with a few contracts terminated in the Dubai office and the remaining employees relocating to various African offices. He also indicated that significant staff reductions across 11 markets were in preparation for the end of 2022.
Since the e-commerce giant has been experiencing successive quarterly losses since its initial public offering in 2019, it is still premature to assess the effects of the recent changes on the company’s financial results.
However, there are reasons for investors to be hopeful. The implementation of recent organizational changes has enabled Jumia to save over 30% in monthly staff costs.
The company also expects to reduce losses by up to 50% this year and end with approximately $100-120 million in losses.
To allocate resources more effectively, Jumia has finalized some business exits it previously announced. This includes discontinuing Jumia Prime in all markets and scaling back first-party groceries and food delivery operations in some markets.
These activities accounted for less than 1% of group GMV in the first nine months of 2022, and 2% of group adjusted EBITDA loss.