African e-commerce giant Jumia laid off over 900 employees or about 20% of its overall workforce across its 11 markets in the fourth quarter of 2022, according to its released fourth quarter and full-year 2022 financial results.
As part of its streamlining efforts, it also undertook a headcount reduction of 60% among managerial roles in Dubai, with most of the remaining staff being relocated to its African offices, closer to its consumers, sellers, and operations.
In other cost-cutting measures, Jumia discontinued Prime, its subscription-based delivery service across all its markets last November. The company has also suspended its logistics-as-a-service in a number of its geographical markets except in Nigeria, Morocco and Ivory Coast.
It also scaled back first-party groceries in Algeria, Ghana, Senegal and Tunisia in the quarter and discontinue food delivery operations in Egypt, Ghana and Senegal sting stated that these activities collectively accounted for less than 1% of the group's gross merchandise volume (GMV) in the first nine months of 2022 and 2% of group adjusted EBITDA loss.
The e-commerce company said the streamlining of its organizational structure is part of its strategy to accelerate its path to profitability and further strengthen its fundamentals. It continued that while the fourth quarter results only reflect a fraction of the actions it will be taking, it is seeing early signs of success and remain focused on execution.
It is notable to mention that Jumia has continued to record back-to-back losses every quarter since it went public in 2019; it finished 2022 with $207 million in adjusted EBITDA losses, a 5.3% rise from the $196 million it recorded the year before.
However, the implementation of these recent organizational changes has resulted in a decrease in operating loss and adjusted EBITDA loss by 41% and 30% YoY. respectively in Q4 2022. The company now expects to reduce losses by as much as 50% from the $207 million and end this year with about $100-120 million in losses.