Kenyan B2B e-commerce platform, Twiga, is undergoing a significant restructuring due to macroeconomic challenges that have made raising capital difficult. The company is laying off 33% of its workforce (283 employees out of 850) and implementing strategic operating adjustments to become leaner and more cost-effective.
Changes being made by Twiga include:
1. Disbanding In-House Delivery: The company is eliminating its in-house delivery department and instead hiring contractors on a per-use basis. Twiga is introducing a logistics marketplace to open its delivery services to independent truckers. This move is expected to reduce logistics costs by 40%.
2. Centralized Warehouse Model: Twiga has shut down 10 distribution centers in Nairobi and is now operating from a modern 200,000-square-foot warehouse that was opened last year.
3. Shift in Sales Approach: Twiga has transitioned its sales approach from a traditional sales team to a commission-based agents' model.
These changes are being driven by a combination of factors, including the challenging macroeconomic environment, declining purchasing power among customers, and the need to make the business more resilient to the changing landscape. Twiga aims to optimize its operations, improve efficiencies, and adapt to the changing funding environment in order to secure its future sustainability.
Despite these changes, Twiga emphasizes that its operations are ongoing, and it is actively working to enhance its service offerings and regional operations. The company's backers include Creadev, TLcom Capital, IFC Ventures, DOB Equity, and Juven (a Goldman Sachs spinoff).
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