In January 2024, Jumia, a prominent e-commerce platform in Africa, initiated a round of layoffs affecting employees in Kenya and several other African markets.
The company took this step a month after discontinuing its food delivery business, Jumia Food.
The exact number of employees impacted by these layoffs has not been disclosed.
Employee Concerns and Communication Gap
A Jumia employee, expressing discontent, noted on Glassdoor that news of the layoffs circulated without specific details on affected individuals.
This raises concerns about the communication approach and the work environment for the remaining staff members.
Continued Cost-Cutting Efforts and Organizational Adjustments
This round of layoffs follows a similar move made by Jumia a year ago when the company laid off 900 employees in a cost-cutting initiative.
Some employees were reassigned to different roles within the company during that restructuring.
Jumia stated that these organizational adjustments aim to enhance efficiency and align resources with its path to profitability.
Transition Away from Food Delivery Business
Jumia phased out its food delivery business, discontinuing operations in Ghana, Senegal, and Egypt in early 2023.
The complete exit from the business occurred by the end of the same year.
The company justified this move, citing the unsustainable nature of food delivery and heightened competition from more aggressive players in the market.
Financial Progress and Ongoing Challenges
Under the leadership of Francis Dufay, Jumia has focused on cost discipline and operational cost reductions.
The recently released Q4 2023 report indicated progress, with operational losses down to $4.5 million.
However, challenges such as inflation and currency devaluation in key markets persist, impacting revenue and gross merchandise value.
Outlook and Confidence in E-commerce
Despite challenges, Jumia remains optimistic about the future of e-commerce in Kenya and across the continent.
The company asserts its dedication to providing services to consumers and vendors through the Jumia platform, emphasizing a commitment to sustainability and cost efficiencies.
Conclusion
Jumia’s recent workforce reduction, coupled with its exit from the food delivery sector, underscores the company’s commitment to financial sustainability and strategic realignment.
As Jumia continues to navigate challenges and implement cost-effective measures, the e-commerce giant remains optimistic about the prospects of the African tech market.