Twiga Foods, a Kenyan B2B Agritech logistics company, has announced another round of layoffs affecting 59 employees. This development is part of a broader strategy under the new CEO, Charles Ballard who took the helm in May 2024.
The company stated that the layoffs are aimed at improving operational efficiencies as it focuses on its path to profitability. The recent reduction of workforce at Twiga is coming only after a year, when the company laid off 283 employees, representing a third or 33% of its 850 workforce as it pushed for a “lean, agile and cost-effective organization.”
Twiga foods cited the decrease in the purchasing power of its users as justification for the most recent round of layoffs and modification in operations. Despite having raised significant capital over the past decade, the company has faced challenges, including financial struggles that led to issues with paying salaries and suppliers, as well as legal battles over unpaid dues.
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The company found itself in financial distress, facing a liquidation notice from Incentro Africa Limited over unpaid debts amounting to USD 261,878.75. The recent layoff at Twiga Foods has sparked widespread reactions from Kenyan Netizens as some pointed out that the problem with the company is leadership.
On X, @JengaHustle wrote,
“The issue with Twiga feeds is leadership-based. The company has had significant operational difficulties under previous management, which led to inefficiencies and financial strains. Even after appointing a new CEO and securing additional funding, Twiga Foods continues to face serious challenges, as evidenced by recent layoffs. These redundancies suggest that the company is still struggling to achieve sustainable growth and may be dealing with deeper structural problems”.
Twiga Foods’ failure in Kenya is attributed to several challenges which include overexpansion, financial mismanagement, operational inefficiencies, adverse market conditions, strategic missteps, and legal disputes. While the company’s innovative model showed promise, these critical issues have hindered its ability to sustain growth and profitability.
The former CEO Peter Njonjo had previously noted that the cost of capital for venture-backed startups had risen significantly over the past two years, which has put pressure on companies like Twiga Foods to reassess their business models to remain competitive.
In March 2024, amidst these growing challenges, Njonjo left his position following a successful $35 million fundraising round through convertible bonds. This development sparked rumors and speculation about the circumstances surrounding his departure, with some insiders suggesting that the former CEO may have been pushed out due to the company’s ongoing difficulties.
Njonjo was replaced by Charles Ballard, an ex-Jumia executive who took over as CEO in May 2024. Ballard in a bid to put the company on a path to profitability stated that the recent layoffs are essential for Twiga to refine its service offerings and build a stronger foundation for long-term growth.
With Ballard joining Twiga Foods, the company aims for continued growth and innovation in the food distribution industry. His diverse background and apt vision make him a highly valuable addition to the company’s leadership team. Ballard’s appointment comes at a time when Twiga Foods targets bolstering Kenya’s agricultural sector.
Notably, despite the recent layoffs, Twiga is also creating 25 new positions within its growth and innovation departments. This move suggests a strategic shift towards areas that the company believes will drive future growth, including stronger partnerships with fast-moving consumer goods (FMCG) manufacturers, logistic efficiencies, and the development of enhanced tech solutions.