Twiga, a B2B e-commerce food distribution network in Kenya, has laid off 211 of its full-time employees following a restructuring that saw the company’s internal sales team disbanded,
The laid-off employees constitute about 21% of the over 1,000 employees domiciled in Kenya. The company serves as a link between farmers or agricultural producers, manufacturers of fast-moving consumer items, and merchants.
According to TechCrunch, the CEO and co-founder of Twiga, Peter Njonjo, said that the laid-off trade development representatives were given the option of working for the company as independent agents with pay based on the customers they acquire and sales they make.
“Twiga recently launched a new optimized sales agents’ program … where current Trade Development Representatives (TDRs) will transition from permanent employees into independent agents on a 100% commission basis,”
In addition, the company confirms that the transition of the TDRs was in line with labour laws and that impacted employees were granted the first right of refusal to transition to the new model.
In addition to signing up vendors, the representatives handled customer service, market research, and product promotion. The agents in the current proposal will perform comparable tasks.
Reports suggest that Twiga has limited its staff travel allowances as part of its cost-cutting measures.
The company says the new model has the capacity to transform individuals and former sales employees into potential entrepreneurs, citing other businesses in the country where the model is already working.
“This transition creates an opportunity for entrepreneurship open to former sales agents and the general public. The benefit of this transition is that it allows for higher earnings based on the effort and enterprise of the agent.
This model has worked with other businesses like insurance and banking that have transitioned fully into Independent Agents in Kenya.”
Twiga joins the layoff trend
Twiga, co-founded by Njonjo and Grant Brooke in 2014, is the latest firm to cut staff due to a downturn in venture capital funding that has made it difficult to get funds for operations and growth.
On Monday, Amazon became the latest member of the big six tech companies with plans to release some staff members because of dwindling sales revenue and stock value in the stock market.
Also, recently, Facebook’s parent company, Meta, cut 13% of its staff, representing the highest in the company’s history. Twitter also recently laid off approximately half its workforce following Elon Musk’s $44 billion acquisition of the company.
Read also: Twitter sued as mass layoffs begin today
For Twiga, the changes come exactly a year after it raised $50 million in a series C round to scale in Kenya and expand to neighbouring countries. The round was led by Paris- and Nairobi-based family office and private equity firm Creadev as TLcom Capital, IFC Ventures, DOB Equity and Goldman Sachs’ spinoff Juven made follow-on investments.
To address traceability issues, stock-outs, and price fluctuation, which have made it difficult for the company to deliver on its promise of affordability and food security, they also just developed Twiga Fresh, an addition to its private label.
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