Jumia laid off 20% of staff in Q4 2022 amid work to reduce losses by half this year

Jumia, arsenic portion of its streamlining efforts, reduced headcount by 60% successful Dubai and “undertook wide headcount reductions that resulted successful complete 900 position terminations crossed its 11 markets, corresponding to a 20% headcount reduction.” This occurred successful Q4 past year, according to nan connection containing Jumia’s FY2022 financials.

This news follows Jumia Supervisory Board’s statement connected executing much elder guidance shake-ups erstwhile it appointed Francis Dufay arsenic acting CEO past November “as it planned to prime leaders and determination centers person to consumers and sellers successful Africa” and Dufay’s first interview pinch TechCrunch wherever he mentioned that Jumia had begun to make those changes. According to nan past acting-CEO, a handful of contracts had been terminated from nan company’s Dubai agency while those who remained relocated to various African offices. He besides told TechCrunch that Jumia was preparing to make important unit reductions crossed 11 markets by nan extremity of 2022. 

It’s excessively early to show really acold nan changes will impact nan e-commerce giant’s bottommost line, fixed really it has endured years of unending losses. For one, nan institution has recorded back-to-back losses each 4th since it went nationalist successful 2019; it vanished 2022 pinch $207 cardinal successful adjusted EBITDA losses, a 5.3% emergence from nan $196 cardinal it recorded nan twelvemonth before. Yet, there’s a logic for guidance to beryllium optimistic. Between October 2022 and now, nan headcount reductions and changes nan caller management undertook aft their first 100 days allowed Jumia to prevention complete 30% successful monthly unit costs. “The implementation of these organizational changes resulted successful $3.7 cardinal successful one-off restructuring costs booked successful nan 4th fourth of 2022,” nan company’s connection added.

Also, adjusted EBITDA nonaccomplishment has decreased successful nan past 2 quarters since nan caller guidance took complete and nan institution now expects to trim losses by arsenic overmuch arsenic 50% and extremity this twelvemonth pinch astir $100-120 cardinal successful losses.  

Jumia has besides finalized immoderate business exits it announced it would make successful Q3 and Q4 2022; nan e-tailer took these measures to amended assets allocation and attraction connected halfway areas pinch charismatic finance returns. Jumia Prime will beryllium discontinued crossed each its markets. The institution will besides suspend its logistics-as-a-service successful each markets isolated from Nigeria, Morocco and Ivory Coast. Then, standard backmost first-party groceries successful Algeria, Ghana, Senegal and Tunisia. And discontinue nutrient transportation operations successful Egypt, Ghana and Senegal. The institution stated that these activities accounted for little than 1% of group GMV successful nan first 9 months of 2022 and 2% of group Adjusted EBITDA loss. 

Meanwhile, quarterly progressive customers connected Jumia dipped 15% from 3.8 cardinal successful Q4 2021 to 3.2 cardinal customers successful Q4 2022. Jumia said this happened because nan economical situation successful nan countries it operates constricted really overmuch users could spend. It besides pointed to a deliberate simplification successful really it promoted merchandise categories pinch “challenging portion economics.”

The institution besides noticed declines successful orders, gross merchandise value, and full costs worth from Q4 2021. Orders reduced 12.5% from 11.3 cardinal to 9.9 million; GMV. 14% from 330.1 cardinal to 283.1 million; and TPV, 18% from 90.5 cardinal to 73.9 million. Despite nan driblet successful these metrics that Jumia had steadily grown complete nan past mates of quarters, its gross took a different move and witnessed a 7.1% year-on-year summation from 62 cardinal successful Q4 21 to 66.5 cardinal successful Q4 22. Also, gross profit accrued 21.9% year-on-year arsenic operating nonaccomplishment saw a 41% drop.

In 2021, Jumia vanished pinch $512.8 cardinal ($117.1 cardinal of rate and rate equivalents and $395.7 cardinal of word deposits and different financial assets). By nan extremity of 2022, its liquidity has reduced by much than 50% to $227.8 ($72.1 cardinal of rate and rate equivalents and $155.7 cardinal of word deposits and different financial assets. Shares of nan Africa-focused but U.S.-headquartered e-commerce institution fell 10% to astir $3.78 astatine nan clip of publication.

And to immoderate promising news, Dufay — aft replacing nan company’s co-founders past November and spending 3 months arsenic acting CEO of Jumia — has been appointed Jumia CEO. As such, “the executive hunt that was being conducted has now been concluded,” nan institution said successful its full-year 2022 financials referencing nan activity update. “The assignment reflects nan beardown assurance of nan Board successful nan activity of Francis and his expertise to successfully standard nan business to profitability.”