Jumia has sacked 900 workers to save cost, resulting in a 20 per cent reduction in workforce, Ripples Nigeria gathered from the firm’s 2022 Fourth Quarter Financial Statements.
In the financial statement dated February 16, 2023, and obtained on Friday, Jumia said cost reduction is a key priority in the company’s strategy going into 2023.
Some of the locations affected include Egypt, Ghana and Senegal. Also, Jumia’s Dubai office was shut down, with the firm relocating its staff to Africa.
Jumia disclosed that its “logistics-as-a-service” business was suspended in some markets, while food delivery operations were discontinued in Egypt, Ghana and Senegal.
Read also:Jumia closes 60-man Dubai office to cut cost
“In the fourth quarter of 2022, we undertook significant headcount reductions, resulting in over 900 position terminations, corresponding to a 20 percent headcount reduction.
“We have streamlined our organisational structure, creating leaner, more effective teams fully committed to the execution of our strategy.
“As part of our streamlining efforts, we have significantly reduced our presence in Dubai where certain management functions were located, reducing headcount by over 60 percent. Most of the remaining staff are being relocated to our African offices, closer to our consumers, sellers, and operations.
“We expect these headcount reductions to allow us to save over 30 percent in monthly staff costs starting from March 2023, as compared to the October 2022 staff cost baseline. The implementation of these organisational changes resulted in $3.7 million in one-off restructuring costs booked in the fourth quarter of 2022,” Jumia said.
The cutback to Jumia’s cost structure is driven by the $49.8 million operating loss recorded in the fourth quarter of last year.