Vendease, a Nigerian food procurement start-up, laid off 9% of its workers, or 27 employees out of a total of almost 300, this week. There has been much discussion regarding the decline in funding for African entrepreneurs. That’s why the news of Vendease raising $30 million in September 2022 cut through the clutter; it was a rare large splash of funding news, and it grabbed all the attention.
The company says that it will use this money to strengthen its presence in these areas and grow into new ones. From the outside, it appeared that the startup was thriving and on the rise.
Nonetheless, many sources reported that the startup is now downsizing two months after its massive announcement. In a statement to TechCabal, the startup said that the decision to cut staff was made to improve performance and had nothing to do with the current slowdown in the global economy.
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The Reason For Their Decision
Tunde Kara, the CEO and co-founder, confirmed in a conversation with TechCabal that there were no economic factors in making this decision. In a statement, the new company said that it had decided to let go of people who were not doing their fair share.
The statement says that the company has nearly tripled its staff in the past year and that the number of people using its platform has grown by 200%, to 3,000 people, in the same time period. He also stated that the startup’s income had increased fivefold since last year.
One source, who didn’t want to be named out of fear that the company wouldn’t pay out severance, said that there had been no talk about the layoffs. “I basically slept with an employee and woke up to a termination letter.” Multiple sources also claim that they received their emails in the early hours of the morning, with one person estimating that the email arrived at 2 a.m. on Tuesday.
“To continue this remarkable growth and success, we had to make the difficult decision to adjust our headcount.” This was done to address performance issues we had identified within the team. “Every employee that has been affected by this adjustment has been offered a comprehensive severance package that will adequately compensate them for any inconvenience caused by the decision,” the statement read.
When asked how the firm analyzed performance and opted to fire employees due to poor performance, the startup stated, “All of these former employees had been on performance improvement programs for months (some for over a year), and we had made various attempts to support their improvement.”
As a result of a slowdown in funding around the world and more pressure from venture capital firms on startups to make money or raise earnings, a number of companies have let people go. According to a data portal that has been tracking layoffs since the outbreak, 853 employers have cut off 137,492 workers this year alone.
Vendease is now seeking individuals to replace the departing employees, according to the statement. “We are already actively looking for people to fill many of the affected positions, and we look forward to Vendease continuing to grow and make money as we make it easier for African food businesses to get the supplies, financial services, and other help they need to run the most successful businesses.”
About Vendease
Vendease is an online marketplace for food service enterprises in Africa. Owners and managers of food service businesses can use Vendease to digitize, track, and automate their purchasing and inventory management. Vendease also gives businesses analytics to boost profitability and decrease waste.