Prominent African e-commerce platform Jumia conducted a round of layoffs within its workforce in Kenya and other African markets in January 2024. This decision came a month after Jumia opted to terminate its food delivery business, Jumia Food. The total number of employees affected by these layoffs has not been revealed.
One anonymous Jumia employee voiced their confusion on the job review website Glassdoor in early February 2024 expressing lack of communication about the layoffs and uncertainty about job security.
Notably, this is not the first time the company has reduced its workforce. The previous year, as part of an effort to decrease spending and steer the company towards profitability, Jumia terminated the contracts of around 900 employee, and some of the staff, though, were repositioned within the company.
Jumia’s goal is that of becoming profitable requires a review of investments, developmental innovation, and accordingly, rearranging teams and resources in certain areas. As part of their optimization efforts, the company is making organizational changes in several African countries including Kenya.
Despite the layoffs, Jumia is optimistic about the future of e-commerce in Kenya and Africa and will carry on providing its service to customers and vendors.
In 2023, Jumia began to shut down its food delivery business by discontinuing operations in regions like Ghana, Senegal, and Egypt. By the end of that year, Jumia Food had fully packed up, even removing its application from app stores. According to the company, its food delivery division was unsustainable due to stiff competition from rivals.
Under Francis Dufay’s leadership, Jumia has prioritized stringent cost management and the reduction of operational expenses. The company’s Q4 2023 report, released recently, demonstrates progress towards its objective, with operational losses decreasing to $4.5 million for the quarter, and a reduction in advertising expenditure.
Nevertheless, the company continues to grapple with complications arising from inflation and currency devaluation in some of its critical markets. Evidently, these challenges have resulted in declining revenue and a decrease in gross merchandise value (GMV), which is a measure of the total value of merchandise sold on the platform.
Despite these hurdles, Jumia maintains that adopting strict cost discipline and witnessing positive developments in certain markets will be instrumental in achieving profitability.
