E-commerce company, Jumia, has downsized its workforce by 20% as part of the company's strategies of cutting costs and reducing losses. The company made this disclosure on Thursday 16th February 2023 and also announced that it has streamlined its organizational structure and put in place more effective teams fully committed to the execution of its strategy.
The company has reduced its presence in Dubai where certain management functions were located. Jumia said it reduced its headcount in Dubai by 60% while most of the remaining staff are being relocated to its African offices, closer to its consumers, sellers, and operations.
According to Jumia, “We expect these headcount reductions to allow us to save over 30% in monthly staff costs starting from March 2023, as compared to the October 2022 staff cost baseline.
“The implementation of these organizational changes resulted in $3.7 million in one-off restructuring costs booked in the fourth quarter of 2022,” the company said, adding that the headcount reductions were done in Q4 2022.
“As part of that, we are working on optimizing the returns on our paid online marketing investments by rationalizing marketing channels.
“We are also allocating a higher share of investment to local offline channels that help us build brand awareness and consideration in a cost-effective manner.
“We are also working on a comprehensive plan to drive fulfilment cost efficiencies. This includes a number of actions such as optimizing our footprint and logistics routes, improving warehousing staff management and productivity, reducing packaging costs, and many more.?
“We have seen early signs of success of this strategy in our e-commerce physical goods business where the freight & shipping cost per package decreased by 23% year-over-year in the fourth quarter of 2022,” the company stated.
Jumia has also confirmed Francis Dufay, as CEO, having been in an acting capacity.