Spleet Lays off Employees as Inflation Hits the Economy Hard

Property tech startup Spleet, which raised $2.6 million in 2022 from investors including MaC Ventures and HoaQ Fund, plans to fire an unspecified number of staff members due to pressure from rising costs from landlords it works with and inflation.

What Spleet is All About 

Spleet, which was founded in 2017, enables Nigerians to rent homes and make monthly payments rather than the customary yearly rental fee that is assessed in many areas of Lagos.

They provide as little as possible in exchange for access to high-end residential solutions. To find their next home, customers can filter based on price, location, type of apartment, and duration.

The goal of Spleet is to provide effective and reasonably priced rental management to Nigerian landlords and tenants in the future. Their products assist clients in finding apartments and making monthly payments, investigating potential tenants and completing due diligence, requesting property management, and applying for rental loans.

Inflation Cited to be the Cause of Layoffs 

One reason given for the layoffs was inflation. Spleet is impacted by inflation in multiple ways. Higher operating expenses result from it, including higher rent and property prices. Profit margins were squeezed, and Spleet found it more difficult to continue operating.

Furthermore, inflation decreased the purchasing power of consumers, which might lead to a decline in the need for Spleet’s services. All in all, it produced a difficult business atmosphere. 

This implies that Spleet would have to increase their spending in order to maintain a profitable operation. These increased operating expenses may reduce their earnings and make it more challenging for them to remain in business. That’s the rationale behind the layoffs—to reduce expenses.

Impact Of Inflation On Spleet Operation 

According to someone familiar with Spleet’s operations, the layoffs will impact all 32 full-time employees who are not involved in core operations. The business refuted this assertion but would not provide further details.

The CEO of the company, Adetola Adesanmi, stated, “I cannot comment on the number of people that will be affected; we’re still in the middle of the process.”

Startups in the property tech space, such as Spleet, argue that monthly rental agreements help tenants better manage their finances. The properties that the company leases are the focal point of the asset-light model.

Conclusion

Adesanmi stated, “We’re letting go of some team members because landlords started renewing at 0.8 to 2.2x last year’s rent when prices went up.” “A lot of our tenants can’t afford that, so firing employees is the best way for our business to survive.”

Two people who were present at the talks said that the company informed the staff about the layoffs during a Tuesday all-hands meeting. A participant in the meeting recalled the CEO stating, “There will be difficult decisions because of the present macroeconomic conditions.”