Nigerian food delivery startup Chowdeck has reduced its contract workforce by 68% as part of efforts to streamline operations and improve efficiency. The company, which has seen rapid growth over the past year, says the layoffs are not due to financial struggles but rather the result of process improvements that have reduced the need for manual work.
Chowdeck’s operations team grew from 20 people in January 2024 to 120 by early 2025 to keep up with demand. However, as the company aims to expand five times its current size this year, it has found ways to automate and simplify tasks. CEO Femi Aluko explained that teams that once needed 24 people to function can now run smoothly with just two, thanks to new efficiencies.
These changes have also led to faster deliveries, cutting average wait times from 41 minutes to 33 minutes.
Read also: Chowdeck CEO talks $2.5M seed funding and the Nigerian food delivery market
The 86 contract workers affected by the layoffs were informed in a meeting led by Aluko. Chowdeck has offered them three months’ salary and continued health insurance as part of a severance package. The company is also helping them find new job opportunities. Full-time employees remain unaffected.
Despite the job cuts, Chowdeck is expanding. The company recently completed its 10 millionth delivery, with 60% of those happening in just the last nine months. In January, it launched services in Kaduna and Owerri, and now it’s preparing to enter the Ghanaian market, with a beta launch in Accra on the way.
Chowdeck’s next challenge is scaling efficiently while competing with other food delivery platforms in both Nigeria and Ghana.
The Nigerian food delivery market is witnessing intensified competition, with homegrown startups like Chowdeck, FoodCourt, and Heyfood, each backed by Y Combinator, vying for market share alongside international players such as Glovo. Glovo, which entered Nigeria in 2021, has invested over $100 million to establish its presence in Africa. Chowdeck faces the challenge of competing against Glovo’s established international presence and resources.
Chowdeck has been proactive in securing strategic partnerships to bolster its market position. In August 2024, the company announced an exclusive partnership with Chicken Republic, a well-established quick-service restaurant chain, to enhance delivery services in Lagos and Ibadan.
The recent layoffs at Chowdeck align with a broader trend of workforce reductions among tech companies in Nigeria and across Africa. For instance, Jumia, a leading African e-commerce retailer, has aggressively cut costs by reducing headcount and exiting non-core activities, including everyday groceries and food delivery, to enhance profitability.
Moreso, Hewlett Packard (HP) recently announced plans to cut 5% of its global workforce, amounting to over 2,500 employees, as part of a cost-saving initiative. This move aims to achieve $350 million in gross savings by the fiscal year 2027, reflecting broader economic uncertainties and high interest rates affecting enterprise customer spending.
These developments highlight the tech industry’s current volatility, emphasising the need for companies like Chowdeck to navigate both local competition and global economic challenges carefully.
