Jumia, the ecommerce giant in Africa has had a difficult 2019 and it seems it is getting worse.
According to Gadgets Africa, sources indicated that they are laying off 30 employees in their Kenyan workforce, which translates to 6% of their workforce. Apparently this is a move by Jumia’s parent company (Rocket Internet) decision to cut costs.
This news comes Jumia exited the Tanzanian market just a week ago which came after they also decided to leave the Cameroon market. They cited that they needed to ‘focus resources’ in other markets as part of their reduction in operating costs.
Jumia was operating in a number of markets which has now shrunk to these African countries which include Nigeria, Egypt, Ivory Coast, Angola, Senegal, Morocco, Ivory Coast, South Africa, Uganda, Ghana, Algeria, Tunisia and Kenya.
This trend by Jumia means that they are continuing to evaluate their positions in other countries they are based in which could mean either closing them or scaling operations down.
Jumia has had quite the year. They listed on the New York Stock Exchange this year and the stock did quite well at the beginning. However, the stock tanked thanks to a damning Citron Research report which stated that they had failed to state that 41% of their orders were either returned, not delivered or cancelled. This led them to be slapped with a class action lawsuit over that IPO.
This has also been a difficult year for ecommerce sites in the country. Safaricom’s own Masoko was recently downgraded into an online Safaricom shop after they cut off 3rd party vendors from the platform.
Jumia Kenya’s CEO, Sam Chappatte sent out an explanation to the Jumia Kenya’s situation.
As discussed in today’s town halls, after careful consideration, we have decided to reduce the size of some teams. Approximately 6% of our colleagues are affected in our Kenyan business. These roles have been identified following an operating model review, reflecting productivity improvements achieved and evolving priorities.
This means that some of our colleagues will no longer have a role at Jumia from 5th January 2020. We are making this decision to support our path to success and help put our focus and resources where they can bring the best value and help Jumia thrive.
We understand this is very difficult for those directly impacted and we will work closely to support their transition in the weeks ahead. Our HR team and line managers will lead 1:1 discussions with those impacted over the course of tomorrow (5th December).
We have good momentum and an exciting year ahead of us in Kenya. However at this moment, our thoughts are with the impacted colleagues.