Kenyan B2B Agritech logistics startup, Twiga Food, has announced a fresh round of employee layoffs. The announcement comes nine months after the Agritech logistic platform laid off 211 trade development representatives.
The Kenyan Agritech said it is laying off 283 employees, representing a third or 33% of its 850 workforce as it pushes for a “lean, agile and cost-effective organization.”
Twiga cited the decrease in the purchasing power of its users as justification for the most recent round of layoffs and modification in operations.
Peter Njonjo, co-founder and CEO of Twiga in a statement said that it was useful to notice that, in the past 24 months, the macroeconomic climate has changed substantially, both locally and globally, driving up the cost of capital. The co-founder mentioned that venture-backed start-ups now face much higher capital costs, necessitating a reorganization of the business model to boost its adaptability to the current climate, and those that don’t adapt won’t be around tomorrow, according to
The startup also announced that it has also closed 10 distribution sites in Nairobi and shifted all activities to a contemporary warehouse with 200,000 square feet that it formally opened last year. Twiga Foods Limited operations are still active. According to Njonjo, Twiga, however, has made some interventions to streamline its operations and improve operating efficiencies based on recent corporate fine-tuning processes.
“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,” said Njonjo.
Twiga also confirmed that its Western Kenya operations are ongoing, although some buyers were unable to place orders. It maintained that it is “working on improving its Western Kenya operations in a bid to optimize service in the region.”
“This optimization process will involve the design of an improved route-to-market model in Western Kenya regions such as Kisumu, Kisii, and Eldoret, which a single central depot may ultimately serve once the process is complete. Our Kampala, Uganda Depot continues to operate, as does our Taita-Taveta farm operations,” said Njonjo.
In-house delivery, which was supported by leased vehicles, is one of the new “strategic operating adjustments” being made, according to Twiga.
To achieve this, the business launched a logistics marketplace that makes its delivery services available to independent truckers. The business claimed that its route-to-market tool for its marketplace would cut its logistical costs by 40%.
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