Twiga Foods, the Kenyan B2B agritech logistics company, is facing yet another round of layoffs, revealing a difficult period for the startup just a year after securing new funding.
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.
