Jumia is Cutting Jobs as it Struggles to Make Money

The Giant E-commerce Company

Jumia, African-focused e-commerce has resorted to cutting jobs as they are currently having a hard time staying in business. The company, which currently operates in 14 African countries across the globe, was first launched in Lagos, Nigeria in 2012. Per the company's data, millions of packages including food, travel bookings, and deals have been processed.

Over the years, Jumia has provided several opportunities for individuals interested in finance, technology, human resources, operations, and services. The e-commerce company has built units to run its digital operations sales effectively. It has also acquired more than 80,000 active sellers who use the Jumia services.

The Struggle

The company has recorded a lot of success stories. However, things have not been blooming for the organization lately, hence, the need to cut jobs. Jumia recorded $50.5 million in revenue in Q3 with 33% operating losses compared to the previous year. Gross merchandise value (GMV), also diminished to $240.7 million from $252.7 million in the previous quarter. According to Nairametrics, while Jumia struggled to lessen its operating loss from $64 million to $43.2 million, they have concluded that one of the best ways to cut costs is to reduce staff strength. In the Q3 financial report, the company revealed its intention to reduce staff. It also explained that its decision will birth the creation of a more graceful and profitable organization.

Jumia's Dubai office seems to be more affected by the company's resolve. According to the acting CEO of Jumia, Francis Dufay, a good deal of the company's senior teams in Dubai will relocate to Africa to ensure proximity to the market. The commerce company did not stop at cutting jobs. It also decided to put a stop to its free delivery Prime subscription service due to poor unit economics. The Jumia Prime services offer fast and free delivery, access to exclusive deals, and reduced shipping on Jumia Global orders.

Meanwhile, Jumia is taking actions

The company plans to pause its logistics services in markets that are short of logistics infrastructure, stating that the "pause" will not affect the operations in Morocco, the Ivory-coast, and Nigeria. While it is most likely that Jumia will not be hiring for the time being, with other latest Nigerian startup companies in the food industry such as Glovo, Chowdeck, Eden Life, and Anchor, the reverse is the case.

In October, Chowdeck took to its Twitter page to call for applicants for the roles of Data analyst, Customer care representative, and Restaurant operations associate. Glovo is also currently hiring for positions including a Brand ambassador, Senior growth analyst, and Account manager among others. Francis Dufay said that Jumia is implementing a tighter cost discipline, bringing more focus to business, and directing efforts to only substantial activities and resources while sticking to the core values of e-commerce. He further stated that the company has a clearer and brighter picture of what the business will look like after all appropriate measures have been taken.