In Q4 2022, Jumia cut 20% of staff to cut losses by half

As part of its streamlining efforts, Jumia cut managerial headcount by 60% in Dubai and over 900 positions across its 11 markets, affecting 20% of its staff. Jumia’s FY2022 financials show this happened in Q4 last year.

This follows the Jumia Supervisory Board’s note on senior management shake-ups when it appointed Francis Dufay as acting CEO last November to “pick leaders and decision centers closer to consumers and sellers in Africa” and Dufay’s first TechCrunch interview, where he mentioned that Jumia had begun those changes. The acting CEO said a few contracts from the Dubai office were terminated and those who remained were moved to African offices. He told TechCrunch that Jumia would cut staff in 11 markets by 2022.

Given the e-commerce giant’s years of losses, it’s too early to tell how the changes will affect its bottom line. Since going public in 2019, the company has lost money every quarter. In 2022, it lost $207 million in adjusted EBITDA, up 5.3% from the year before. Investors should be optimistic. After 100 days, Jumia saved over 30% in monthly staff costs. “These organizational changes resulted in $3.7 million in one-off restructuring costs booked in the fourth quarter of 2022,” the company said.

New management has reduced Jumia’s adjusted EBITDA loss in the last two quarters. The company expects to cut losses by 50% and lose $100-120 million this year.

Jumia completed business exits it announced in Q3 and Q4 2022 to improve resource allocation and focus on core areas with high investment returns. Jumia Prime will end globally. Logistics-as-a-service will also be halted in all markets except Nigeria, Morocco, and Ivory Coast. Reduce Algeria, Ghana, Senegal, and Tunisia first-party groceries. Stop food delivery in Egypt, Ghana, and Senegal. In the first nine months of 2022, these activities accounted for less than 1% of group GMV and 2% of adjusted EBITDA loss, according to the company.