After Laying Off 900 Workers, Jumia Loses 1 Million Customers in 3 Months

• Jumia’s recent financial statement shows that the e-commerce platform lost 1 million customers in 3 months
• The company said it was a result of the challenging operating environment with record levels of inflation impacting consumers
• This follows a development that saw the company sack 900 workers last year

Financial report for the second quarter of 2023 has shown that Jumia's active client base fell by one million, now amounting to 2.4 million customers.

Similarly, the total value of all items sold on the Jumia platform, or gross merchandise value, decreased to $202 million.

This comes after the corporation reduced 20% of its workforce through layoffs, which resulted in the departure of 900 employees.

The company noted that the staff reduction, which took place in the second quarter of 2022, was part of its initiatives to minimise expenses and reduce losses.

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As e-commerce continues to develop worldwide, Jumia remains one of the top online shopping sites in Nigeria, according to a Legit.ng analysis.

Did Jumia successfully reduce losses

The recent report demonstrated that the business successfully reduced losses, a goal it set when it decided to lay off employees a year ago.

The company noted in a previous report:

We anticipate that these headcount reductions will enable us to save over 30% in monthly staff costs beginning in March 2023, compared to the staff cost baseline in October 2022.

According to the Q2 report, however, a significant decrease in sales and advertising expenses caused the company's operating losses to reduce to $23.3 million in Q2 2023, the lowest recorded figure in four years.

Jumia spent $22.2 million on advertising in the second quarter of 2022 but only $5.8 million in the same period in 2023. Due to layoffs earlier in the year, its general and administrative costs were also lower, and its technology costs were lower compared to Q2 2022.

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Effect of deteriorating economy on sales

However, the deteriorating macroeconomic environment hurt sales, leading to $48.5 million in revenues for the quarter, down from $57.3 million in Q2 2022 and a lower order volume of 6.5 million vs. 10.3 in Q2 2022.

The company commented on the performance, pointing out that the challenging operating environment continues to influence user performance, with record levels of inflation impacting consumer spending and sellers' capacity to obtain goods.

Jumia shares plunge as Amazon announces Nigerian expansion

Legit.ng earlier reported that Amazon is coming to Nigeria, sending shivers down the spine of Jumia investors.

Africa’s leading online marketplace, Jumia’s shares dropped almost 10 per cent on Thursday, June 16, 2022. Read more for a step-by-step guide on how to order on Jumia.

Source: Legit.ng