Latin America unicorn startup Merama lays off nearly 10% of its workforce to refocus on strategy

Merama, a Latin America-based e-commerce startup that achieved unicorn status within just a year in business, has laid off nearly 10% of its staff, according to an exclusive report from Reuters, citing a statement from the company CEO Sujay Tyle.

Tyle told Reuters that the layoff will impact about 8-9% of the company’s employees, while the total headcount will still exceed 400 employees. He emphasized that this decision was not solely a cost-saving measure but rather part of Merama’s strategic shift as it enters a new phase of growth.

Tyle explained that the affected staff were primarily working on projects that are no longer a priority for the company. Instead, Merama intends to refocus its efforts on brands that generate over $15 million in revenue, aligning with its revised strategy, Reuters reported.

Acknowledging the difficult nature of the layoffs, Tyle assured that there are no further plans for additional job cuts. He also stated that the company enjoys a healthy financial runway and has reached a positive cash flow status, indicating a promising outlook for Merama’s future endeavors.

“It was a difficult day,” Tyle said of the layoffs, adding there were no plans for another series of job cuts. Tyle added that the company had a “quite healthy runway” and was now cash flow positive.

Merama, which first burst onto the e-commerce aggregator scene in 2021, has raised a total of $345 million in funding from investors including Japanese giant SoftBank Group. The company was last valued at $1.2 billion.

Founded in 2020 by Felipe Delgado, Olivier Scialom, and Sujay Tyle, the Mexico-based Merama is an e-commerce aggregator platform that partners with e-commerce product sellers. It also It aggregates fast-growing online brands to centrally manage areas like marketing and supply chain management.

The news of Merama’s layoffs comes at a challenging time for Latin American startups. In May, there was an 82% decline in venture funding for startups in the region compared to the previous year, as reported by data group Sling Hub. This decline can be attributed to various factors, including high-interest rates and concerns about a global recession, which have shaken up tech valuations and investor confidence.

Due to the funding squeeze, numerous startups throughout Latin America have been compelled to downsize their operations. Prominent examples include Provu, a Brazilian fintech company operating in the buy-now-pay-later (BNPL) space, and Addi, a Colombian fintech unicorn. Both companies have recently announced significant layoffs as they navigate these challenging market conditions.