Photograph — TechCrunch

Since 2022 began, layoffs have become one of the most discussed topics in the global tech space. The reasons are quite understandable: the US, Asian, and European money markets have been trending downwards; venture funding has slowed down for startups; the stock market has plummeted, and IPO-ed companies have been shaving off their valuations. Because of recession fears, investors are being stringent with their money, mainly toward growth-and late-stage startups. All these events force companies to take drastic measures to keep their businesses afloat.

This layoff trend did not immediately catch on in Africa. But last week, we reported how it was gradually creeping into Africa. Now, it’s in full steam. More tech companies are laying off workers, citing the economic downturn. Egypt, where startups raised $317 million during the first half of 2022, was one of the first countries to feel the heat as layoffs, salary cutbacks, and even business shutdowns became widespread. A report by Wamda shows how Egyptian startups have been quietly laying off workers this year. Only SWVL was vocal about its layoff plans. Others include Vezeeta, a health-tech startup that raised $40 million a few years ago; Elmenus, a food-tech startup backed by Careem; Capiter, a B2B e-commerce retail platform that raised $33 million last year; Trella, a trucking startup that recently raised $44 million in its Series A round; and ExpandCart, an e-commerce enabler platform.

Between our last report and today, more tech firms have trimmed their workforce. Here are the most recent ones:

  • 54Gene

54Gene, a genomics startup that raised $25 million in September 2021, has laid off 95 employees, most of whom were contract workers. The three-year-old company has an audacious primary goal of achieving healthcare equality for Africans by plugging the genetic material gap. However, in 2020, 54gene saw an opportunity to make more money during the pandemic by repurposing its lab capabilities and repositioning itself to conduct COVID-19 testing, which spiked in Africa when the company closed its Series A round. It was a significant part of the company’s operations; at one point, 54gene was one of Nigeria’s largest providers of COVID testing. But today, COVID tests are no longer as in-demand as they used to be. As a result, the company had to let go of several employees whose job descriptions related to COVID. A report by Olumuyiwa Olowogboyega says 54Gene has laid off “a majority of the marketing department.” It also states that the company has slashed salaries and that “a few senior employees have taken a reduction in salary in exchange for stock options.”

  • Alerzo

Before 2021, Alerzo was a little-known B2B e-commerce retail startup based in Ibadan, Nigeria. But in August, it came into the limelight when it announced a $10.5 million Series A funding round. It stated then that it would use the new funds to expand into Northern Nigeria and launch a payment and lending platform.

After that funding round, Alerzo increased its hiring, adding hundreds of casual workers. These part-time employees work in Alerzo’s over 40 warehouses across Nigeria, with full-time employees accounting for less than half of the company.

But a Notadeepdive report cites sources saying Alerzo’s staff headcount has become a financial burden. As a result, the company has laid off 100 people, most of whom were contract workers, and slashed some employees’ salaries.

  • Viamo

Viamo, a Ghana-based social enterprise, is the latest tech startup to be swept by the layoff wave. A report by TechCabal states that the company has laid off “a lot” of employees, as the number remains uncertain.

The 10-year-old company helps NGOs, government agencies, donors, and businesses communicate directly with their audience by using local languages to disseminate their messages via mobile phones, with a presence in Asia, North America, the Middle East, and North Africa. In Africa, Viamo is present in 41 countries and is headquartered in Ghana. Last year, it raised $5 million in a Series A round to drive market expansion.

It’s noteworthy that this layoff is not Viamo’s first—it happened four years ago. Per TechCabal, the current wave came because it had a “redundant workforce.” The COVID pandemic gave the company a revenue boost, as it ran programmes globally on combating misinformation. Viamo became one of the world’s most visible digital frontrunners in the fight against COVID-19 and vaccine-related myths in emerging markets. It provided urgent data collection assistance to its partners, including the WHO, UNICEF, UNFPA, UNECA, UNDP, and the World Bank. However, most organizations no longer consider that to be a top priority. Hence, it needed to shed many workers.

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