Traction applicationsa Nigerian fintech startup, has confirmed in a statement to Techpoint Africa that it will lay off some employees following its recent acquisition by
OmniRetail. The company said the decision was partially influenced by the acquisition.
“Following the acquisition of Traction Apps, as with all mergers and integrations, we are optimizing certain departments to align with our broader vision. This restructuring is a strategic step to improve the efficiency and scalability of our value chain, ensuring we remain well positioned for long-term growth. Most of the senior team members who played key roles in Traction’s growth have been retained,” the statement said.
Traction Apps declined to share details on the number of employees or departments affected, but a source familiar with the matter revealed that sales, engineering and marketing teams were affected by the layoffs.
The startup added that some members of the Traction team have moved into roles within OmniRetail, while continuing to explore “other opportunities for others.” This transition is part of the company’s broader efforts to streamline its operations following the acquisition.
Affected employees were reportedly informed of the decision about a week before the acquisition, which saw co-founders Mayowa Alli and Dolapo Adejuyigbe join OmniRetail as chief technology officer for payments and chief operating officer for payments, respectively. This decision is part of the leadership integration strategy following the merger.
According to the startup, severance packages will be paid to affected employees, in accordance with Nigerian labor laws. Additionally, Traction Apps offers career counseling and job placement services to help those affected by layoffs during this transition.
“With the acquisition of Traction Apps, we strengthen our leadership capabilities to provide best-in-class services across the retail value chain,” the statement said, further clarifying that no member of the Traction Apps team Traction management will not be affected by the layoffs.
The two founders, former McKinsey consultants, founded Traction Apps in 2020 after gaining experience working on financial inclusion initiatives at McKinsey. The startup has developed point-of-sale software, virtual accounts, inventory management and invoicing solutions tailored to small and medium enterprises (SMEs) in Nigeria.
Traction Apps also provided point-of-sale (PoS) terminals, lending, and a customer management tool for businesses. A partnership with OmniRetail ultimately led to OmniRetail’s acquisition of Traction.
Financial details of the acquisition were not disclosed; However, Deepankar Rustagi, founder and CEO of OmniRetail, mentioned that the company assumed both debt and equity of Traction Apps.
SOURCE