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Kenya’s Twiga Lays Off 33% of Its Workforce, Launches Contractor-based Logistics Marketplace

Twiga has also shut down 10 distribution centres in Nairobi and shifted all activities to a temporary warehouse

Twiga, a Kenyan B2B e-commerce platform, has announced a new round of layoffs, affecting 283 employees, which represent a 33% of its 850 workforce. According to the company, this action will be a measure of cost-effectiveness in order to keep the business afloat in the face of microeconomic headwinds.

Twiga, a company in the midst of change revealed that one of the plans for important shifts in its operations involves changing its internal delivery system, which used leased trucks, and instead opting for a new approach.

The company now aims to hire contractors based on the number of users they serve. To facilitate this transformation, it has launched a logistics marketplace. This platform opens up its delivery services to independent truckers, allowing them to take part in the company’s delivery operations.

Through a tool within this marketplace called the “route-to-market” tool, the business anticipates a remarkable 40% reduction in its logistics costs. Interestingly, this isn’t the first time the company has made such strategic moves. In the past, Twiga also eliminated its in-house sales team, shifting instead to independent agents. This latest pivot in its approach signifies the company’s commitment to adapting and optimizing its processes for greater efficiency.

The business confirmed to TechCrunch that it has also closed 10 distribution centres in Nairobi and shifted all activities to a temporary warehouse with 200,000 square feet that it formally opened last year. The Soko Yetu platform, one of Twiga’s offerings, allows sellers to choose from a list of suppliers, while Twiga Fresh, its main fresh-produce initiative, aims to address traceability issues, stock-outs, and price volatility.

Twiga Foods Limited

According to the co-founder and CEO of Twiga, Peter Njonjo “Twiga Foods Limited operations are still up and running. However, based on recent corporate fine-tuning processes, Twiga has taken several interventions to optimize its operations and enhance operating efficiencies. These interventions include the introduction of a logistics marketplace, adopting a central warehouse model at Tatu City and transitioning our sales approach to a commission-based agents’ model has also resulted in improved operating efficiency”.

Twiga, which Grant Brooke and Njonjo co-founded in 2014, has addressed the situation with regard to its operations in Western Kenya. According to the co-founder, the company reassured customers that had trouble placing orders that its operations are still ongoing. In reality, it is actively working to introduce modifications to improve its services there.

Kenya's Twiga lays off 33% of its workforce, launches contractor-based logistics marketplace
Twiga foods

An improved route-to-market model will be developed as part of this improvement strategy for Western Kenyan regions like Kisumu, Kisii, and Eldoret. The goal of this, according to the business, is to have a single central depot serving various regions once this process has been completed. Twiga’s farm operations in Taita-Taveta are still active, as is their depot in Kampala, Uganda.

“It is particularly instructive to note that, in the last 24 months, the macroeconomic environment has changed dramatically, locally and internationally, escalating the cost of capital significantly. The cost of capital has increased substantially for venture-backed start-ups, and there is a need to restructure the business model and make it more resilient to the prevailing environment. Those who do not change will not be here tomorrow,” said Njonjo.

Njonjo describes the company’s ongoing initiatives as one to improve its services.

Source : Technext