The Evolution of Chowdeck: From Rapid Growth to Strategic Restructuring
Nigerian food delivery startup Chowdeck lays off 68% of its contract workforce (86 employees—in a bid to streamline operations and enhance efficiency. This significant workforce reduction comes after a period of rapid expansion for the company, which saw its operations team grow from 20 employees in January 2024 to 120 by January 2025 to meet surging demand in Nigeria’s competitive food delivery market.
The Growth That Led to Expansion
Chowdeck’s journey to becoming a major player in Nigeria’s food delivery sector has been meteoric. Founded in 2o21, the startup quickly gained traction by addressing the unique challenges of Nigerian consumers, including payment infrastructure, delivery logistics, and menu diversity. The company’s innovative approach to connecting local restaurants with tech-savvy consumers helped it establish a strong foothold in major Nigerian cities.
The operational team’s expansion was a direct response to the company’s impressive growth metrics. By January 2025, Chowdeck had surpassed 10 million deliveries, with 60% of those occurring in the last nine months alone. This remarkable achievement demonstrated both the growing appetite for food delivery services in Nigeria and Chowdeck’s ability to capture market share.
The Shift to Operational Efficiency
However, as the company matured, CEO Femi Aluko recognized the need to optimize operations. “Our initial approach was to scale our team to meet demand,” Aluko explained during a recent interview. “But as we implemented more sophisticated systems and automation, we found that many of our manual processes became redundant.”
The operational optimizations included implementing AI-driven order management systems, route optimization algorithms, and automated customer service platforms. These technological advancements reduced the need for manual intervention in many areas of the business. Teams that once required 24 members to operate effectively could now function with just two, prompting the difficult decision to reduce the workforce.
The Human Side of Restructuring
The affected contract staff were informed during a company-wide meeting led by Aluko himself. Recognizing the impact of these changes on individuals and their families, Chowdeck has implemented several support measures:
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Severance Packages: Each affected employee will receive three months’ salary as severance pay.
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Health Insurance Continuation: Chowdeck will continue covering health insurance costs for the displaced workers.
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Career Transition Assistance: The company has partnered with recruitment agencies and industry contacts to help laid-off employees find new opportunities.
Notably, full-time employees remain unaffected by these layoffs, highlighting Chowdeck’s strategic approach to maintaining core team stability while optimizing contract positions.
Market Context: Nigeria’s Food Delivery Boom
Chowdeck’s restructuring reflects broader trends in Nigeria’s food delivery sector. The market has experienced exponential growth in recent years, with reports indicating a compound annual growth rate (CAGR) of over 20%. This growth has attracted numerous competitors, including international players like Jumia Foods and domestic startups like Gloo and Koko.
The intense competition has forced companies to constantly innovate while maintaining operational efficiency. “In a market where margins are thin and customer acquisition costs are high, even successful companies must continuously optimize their operations to remain viable,” noted industry analyst Adebayo Adeyemi.
Expansion Continues Despite Workforce Reductions
Remarkably, Chowdeck’s layoffs haven’t slowed its growth trajectory. The company recently launched operations in Kaduna and Owerri, Nigeria, expanding its geographical reach. These new markets represent strategic opportunities to capture additional market share in regions with growing middle-class populations and increasing demand for convenience services.
Perhaps more significantly, Chowdeck is preparing for a beta launch in Accra, Ghana. The company has appointed a dedicated country manager for Ghana and plans to maintain a lean team structure there, leveraging its improved operational efficiency. This expansion into Ghana signals Chowdeck’s ambitions to become a regional leader in West Africa’s food delivery sector.
The Future of Chowdeck
Looking ahead, Chowdeck remains committed to its dual strategy of operational excellence and aggressive expansion. The company plans to continue investing in technology that reduces manual processes while improving service quality. Additionally, Chowdeck is exploring partnerships with local restaurants to develop exclusive offerings that differentiate its platform from competitors.
For the displaced contract workers, Chowdeck’s support measures represent a responsible approach to workforce reduction. Many have already secured new positions through the company’s transition assistance program, demonstrating that even in challenging circumstances, thoughtful corporate policies can mitigate some of the harshest impacts of business optimization.
Industry Implications
Chowdeck’s restructuring serves as a case study for other African startups navigating rapid growth followed by necessary optimization. The company’s approach balances cost-cutting with social responsibility, potentially setting a precedent for how tech companies in emerging markets handle workforce reductions.
As the African tech ecosystem matures, questions about sustainable growth models and responsible scaling practices will continue to arise. Chowdeck’s experience highlights the complex challenges of building scalable businesses while maintaining social consciousness in markets with limited social safety nets.
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