Reports disclose that the company plans to let go of 59 employees in a bid to restructure operations. This layoff comes only a year after the company let go of 283 workers, which represented a 33% reduction of its workforce at that time, August 2023.

The announcement of these layoffs has led to discussions on social media, with many pointing to underlying leadership and operational challenges that have affected the company for some time. 

Users argue that despite a change in leadership and the injection of additional capital, Twiga Foods has struggled to achieve sustainable growth. The layoffs are seen as a symptom of deeper issues within the company’s structure and strategy.

Twiga Foods attributed the previous layoffs to the need for a leaner, more agile, and cost-effective organisation in response to a changing macroeconomic environment. 

Peter Njonjo, co-founder and former CEO, had previously noted that the cost of capital for venture-backed startups had risen significantly over the past two years. This increase, both locally and globally, has put pressure on companies like Twiga Foods to reassess their business models to remain competitive. 

Njonjo emphasised that companies failing to adapt to these new economic realities risk being left behind.

Last year, Twiga Foods also made several adjustments to its operations. The company closed 10 distribution sites in Nairobi and consolidated its activities into a modern 200,000-square-foot warehouse, which was officially opened the previous year.

Twiga’s challenges have been compounded by legal and financial difficulties. In early 2024, the company was embroiled in a legal dispute with cloud provider Incentro over an unpaid $261,000 bill, pointing to its cash flow issues. 

Added to this, founder Peter Njonjo’s departure in March 2024, following the company’s latest funding round, has led to talks about the company’s direction and leadership.

Charles Ballard, an ex-Jumia executive who took over as CEO in May 2024, has stated that the recent adjustments, including the layoffs, are essential for Twiga to refine its service offerings and build a stronger foundation for long-term growth.

Twiga Foods is still active in the market and well-focused on its mission to boost food distribution in Africa through digital innovation. The company also plans to create 25 new roles in its growth and innovation departments.

This marks the third round of layoffs for the company this year, as it strives to scale through the economic challenges ahead.

In a communication addressed to employees on Monday, Spotify founder and CEO Daniel Ek emphasized the necessity of right-sizing the workforce to overcome the hurdles brought about by slow economic growth and escalating capital costs. Ek acknowledged the impact on many talented individuals who have contributed significantly to the company’s success.

The decision, according to Ek, stems from the need to address the gap between the company’s financial goals and current operational costs. The note, subsequently published on the company’s blog, revealed that Spotify, with approximately 8,800 employees, would notify those affected later in the day.

This latest wave of layoffs follows previous cuts of about 6% in June and an additional reduction in workforce in January. Despite a robust performance in user growth and exceeding Wall Street’s expectations in operating income, Spotify faces challenges, particularly in the North American market, where premium subscriber growth has been modest.

Ek acknowledged the scale of the reduction in light of recent positive earnings reports and strong performance. He revealed that alternatives, such as smaller reductions over the next few years, were debated but ultimately decided that a substantial action was necessary to align costs with the company’s objectives.

The move by Spotify is part of a broader trend, with industries globally witnessing significant layoffs totaling over 225,000 employees this year. The tech sector, including firms like Amazon, Google, Meta, Twitter, and Netflix, has also faced notable cutbacks, contributing to growing economic unease among employees.