Nigerian food delivery startup Chowdeck has announced a significant reduction in its contract workforce, cutting it by 68% as part of a strategic initiative to streamline operations and enhance efficiency. Despite experiencing rapid growth over the past year, the company clarifies that these layoffs are not indicative of financial difficulties but rather a response to process improvements that have minimized the need for manual labor.
Chowdeck’s operations team expanded dramatically from 20 employees in January 2024 to 120 by early 2025 to meet increasing demand. However, as the company sets ambitious goals to quintuple its current size within the year, it has identified opportunities to automate and simplify various tasks. CEO Femi Aluko noted that teams that previously required 24 personnel to operate effectively can now function efficiently with just two, thanks to these newfound efficiencies.
These operational changes have also resulted in improved delivery times, reducing the average wait time for customers from 41 minutes to 33 minutes. The 86 contract workers affected by the layoffs were informed during a meeting led by Aluko, who communicated the company’s commitment to supporting them during this transition. Chowdeck has offered these individuals a severance package that includes three months’ salary and continued health insurance, along with assistance in finding new job opportunities. Importantly, full-time employees have not been impacted by these layoffs.
Despite the workforce reductions, Chowdeck continues to expand its operations. The company recently celebrated a significant milestone by completing its 10 millionth delivery, with 60% of those deliveries occurring in just the last nine months. In January, Chowdeck launched its services in Kaduna and Owerri, and it is now preparing to enter the Ghanaian market, with a beta launch planned for Accra.
Chowdeck’s next challenge lies in scaling its operations efficiently while competing against other food delivery platforms in both Nigeria and Ghana. The Nigerian food delivery market is becoming increasingly competitive, with local startups such as Chowdeck, FoodCourt, and Heyfood—each backed by Y Combinator—competing for market share alongside international players like Glovo. Since entering Nigeria in 2021, Glovo has invested over $100 million to establish a strong presence in Africa, presenting a formidable challenge for Chowdeck as it navigates competition from such well-resourced entities.
In response to this competitive landscape, Chowdeck has been proactive in securing strategic partnerships to strengthen its market position. In August 2024, the company announced an exclusive partnership with Chicken Republic, a prominent quick-service restaurant chain, aimed at enhancing delivery services in Lagos and Ibadan.
The recent layoffs at Chowdeck reflect a broader trend of workforce reductions among tech companies in Nigeria and across Africa. For example, Jumia, a leading African e-commerce retailer, has implemented aggressive cost-cutting measures, including headcount reductions and the exit from non-core activities such as everyday groceries and food delivery, to improve profitability.
Additionally, Hewlett Packard (HP) has recently announced plans to cut 5% of its global workforce, which translates to over 2,500 employees, as part of a cost-saving initiative aimed at achieving $350 million in gross savings by the fiscal year 2027. This move underscores the broader economic uncertainties and high interest rates that are impacting enterprise customer spending.
These developments highlight the current volatility within the tech industry, emphasizing the need for companies like Chowdeck to navigate local competition and global economic challenges with careful strategy and foresight.
