Twiga Foods continues layoffs due to tough economic environment
KENYA – Twiga Foods, a Kenyan business-to-business marketplace platform, has initiated another retrenchment round that will see scores of workers sent home, just a few months after 211 were laid off.
The E-commerce startup said the fresh job cut is part of the restructuring model to enhance service delivery.
The firm is fast-tracking its efforts to cut its operational costs in what it claims to be a tough economic environment that is affecting people’s purchasing power.
“We regrettably declare some roles redundant across the organization in full compliance with applicable labor laws. The review has further necessitated the resizing of its operating model across its regions,” said Twiga Foods in a statement released.
The start-up, which links farmers or agricultural producers and fast-moving consumer goods manufacturers to retailers, said it is also resizing its operating model across its regions.
In November 2022, Twiga Foods defended its move of laying off 211 of its full-time employees because of restructuring, stating that by the end of Q1 2023, it will have generated 1,000 opportunities using the agent model.
The dismissed staff were part of the company’s in-house sales department. The staff had the option of working for Twiga Foods as independent agents with pay based on sales and customer acquisitions.
The company outlined that the benefit of the transition is to allow for higher earnings based on the effort and enterprise of the agent.
According to the food distribution firm, the model has worked with other businesses like insurance and banking that have transitioned fully into Independent Agents in Kenya.
In May 2023, Twiga Foods also took another round of headcount, sacking over 130 employees as it sought a transformative path to become a lean, agile, cost-efficient organization.
The layoffs are occurring despite the firm receiving a 300 million financial boost from the government in the form loan late last year, which analysts viewed will catalyze its five-year expansion plan, majorly in West and Central African markets.
Twiga is also in partnership with the Kenyan government to oversee maize production on 20,000 acres of the Galana-Kulalu food security project under a public-private partnership. Founded in 2014, Twiga Foods has raised a total of US$157.1 million across 19 rounds from 23 investors.
The e-commerce space in Kenya is indeed in a tough headway as many consumers adjust their spending due to a tight economic situation.
Last year, Kune, a Kenyan startup that was also operating in the food distribution industry closed down operations due to “economic downturn and investment markets tightening up.”
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