In July 2022, Marketforce, a Kenyan end-to-end distribution platform, reportedly laid off a significant portion of its workforce.
The layoff was a part of a reorganisation strategy in Kenya, one of the company's five markets, which also include Nigeria, Rwanda, Uganda, and Tanzania.
Tesh Mbaabu (CEO) and Mesongo Sibuti (CTO) founded MarketForce in 2018 to eliminate the fragmented distribution networks and stores they saw in small retail establishments.
In 2020, the company launched RejaReja, an asset-light merchant super app and marketplace that allows informal traders to source goods directly from manufacturers and distributors, make and pay for orders digitally, and accept utility bill payments.
RejaReja has grown rapidly since its launch, with over 87,000 orders placed on the platform with an average basket value of $151.
According to TechCrunch, the company laid off 54 employees.
Meanwhile, Marketforce had over 600 employees before the layoff. This equates to approximately 9% of its workforce, primarily from field sales, supply chain, and customer experience departments.
Some of these roles were critical to Marketforce's growth over the last year, as the company focused on onboarding thousands of merchants to its RejaReja platform.
However, according to Mbaabu, they have become redundant now that the company wants to drive more revenue per merchant.
Besides, he said it was difficult for many people, even within the company, to understand why the company raised money and had cash but still laid off workers.
Recall that the company raised $40 million in debt and equity in its Series A round in February 2022.
However, sources said that Marketforce might be struggling with its business as suppliers begin to pull out.
Mbaabu dismissed the claims, stating that "as part of optimising for sustainability, we are driving more consignment-based operations and reducing SKUs, meaning fewer suppliers overall."
Marketforce said it would provide counselling services to employees affected by the reorganisation.
It will also offer training on how to improve CVs, optimise LinkedIn profiles, and prepare for interviews. It plans to partner with recruiters who will consider them for opportunities within other organisations looking to hire.
What’s more, the company will provide a certificate of service and a letter of recommendation, as appropriate, instead of notice, and a severance package of 15 days for each completed year of service and unutilised leave days.
Compared to the rest of the world, the African tech scene has seen fewer layoffs. Sendy, a Kenyan logistics platform, recently laid off employees, adding to previous reports from Swvl, Vezeeta, and Wave.