Nigerian food procurement startup Vendease has overhauled its salary structure from traditional to performance -based after two layoffs in five months.
The Y Combinator-backed company, which laid off 44% of its workforce—approximately 120 employees—last month in its second round of job cuts in five months, transitioned to a performance-based salary model, and replaced traditional pay with a system tied to employee performance, supplemented by an Equity Share Option Plan.
Vendease, which raised $30 million in its Series A round from investors including Partech Africa and TLcom Capital, stated that the restructuring was essential to achieving profitability, and new funding.
According to company documents, Vendease has implemented a phased salary recovery system for its remaining employees.
In February, all employees received a flat salary of ₦140,000 (~$90), regardless of their previous pay. From March to May, wages will increase to 30% of former salaries for employees who meet performance targets—though the company has not publicly defined these targets. Salaries will then rise to 60% between June and August and 90% from September to November, with full salary restoration expected by December, contingent on both company performance and individual contributions.
In addition to these adjustments, the unpaid portion of salaries will be converted into share options under the ESOP, with 50% vesting over ten months and the remainder over three years. However, employees can only exercise these options at a board-approved fair market value, as per the agreement.
Despite the drastic pay restructuring, Vendease maintains that it is now at break-even and nearing profitability.
“Vendease has restructured both its business and operations. We’re a software company, and we want to focus on facilitating OPEX-heavy operations with technology rather than handling them ourselves,” a company spokesperson told TechCrunch.
The startup believes the new compensation model will drive employee productivity while ensuring financial sustainability. “We only spend what we earn, which keeps us consistently at break-even and focused on profitability,” the spokesperson added.
With just over 150 employees remaining, Vendease is now prioritizing internal restructuring, fresh capital infusion, and AI-driven efficiencies to reduce costs and sustain operations.
The company is shifting its focus toward software-driven growth, enhancing its sales and payments solutions, and expanding its credit marketplace. As part of this strategic pivot, Vendease is gradually phasing out its warehousing and logistics operations, aligning its business model with a leaner, more tech-centric approach.
