107,000 jobs could disappear with Opay Nigeria business freeze

A DECISION BY OPAY, THE CHINESE backed start-up company, whose popularity is associated with its now troubled bike ride-hailing business, to freeze most of its operations in the country could wipe out as many as 107,000 jobs, it has now emerged since it was announced on Thursday.

Though it did not come as a surprise to many analysts, the decision to freeze operations appears to have been brought forward by the current harsh economy in Nigeria and the impact of the Coronavirus pandemic that have made it impossible for the company to sustain most of its diverse businesses in the country.

Its business units, including the ride-hailing services, ORide, OCar, as well as the logistics service, OExpress, are affected by the latest action by the Opay management.

Harsh business conditions have affected many Nigerian companies and Opay’s latest action appears to bear this out for a company that has faced the COVID-19 pandemic, a lockdown, and a government ban of its ride-hailing bike service not too long ago, the company suggested on Thursday.

According to Seun Alley, the director, partnership at OPay, the company has created 107,000 jobs in its one year of operation in Africa’s most populous country, where millions of young people are without jobs.

As at Q3 last year, 16 million employable youths in Nigeria were without jobs putting the unemployment rate at 23.1 per cent.

Since the economy started feelGOBAL ing the heat of Coronavirus, more jobs have been lost and in fact, Nigeria Employers’ Consultative Association (NECA) has warned that the rate would surpass 33.5 per cent and many more scary projections have also emerged.

The company noted Thursday that globally, ride-sharing businesses have been heavily impacted by the pandemic.

However, it explained that foreseeing the glooming future several months ago, it had already taken preemptive steps to restructure its business focus away from rides.

“It is worthy to note that this final restructuring has minimal impact on OPay as a whole business,” the company stated.

It also clarified ride-sharing had always been only one part, and not a major part of OPay’s diversified business in Nigeria

In fact, it said, OPay had been investing more and seeing accelerated growth in its commitment to Nigeria’s financial and technology inclusion.

“During the pandemic, we have seen continued demand for our offline mobile money agency, and online digital payment, which remain the core of our business.

“From January to April 2020 for example, we witnessed a 44 per cent growth of offline and online transaction value even in the midst of pandemic and lockdown,” it said.

The company further described this as a testament to the high demand for flexible and easy financial services by Nigerians.

“OPay remains one of the most well-funded and profitable mobile money platforms in Nigeria, and we will continue to do more for our customers.”

It promised to continue to invest in and grow in the eCommerce space, aligning its customer and business eCommerce units which will continue to operate and grow.

“We believe a financial platform coupled with goods’ platform will form the future of Nigeria’s technology development,” it concluded.

While the company promised to better serve its customers through its only remaining business unit, the fintech operations, the fates of thousands of its employees working in other units it has now shutdown remain hanging in the balance.