Twiga Foods, a Nairobi-based agri-tech startup led by Kenyan entrepreneur Peter Njonjo, is embarking on a rigorous cost-cutting initiative to maintain its operations amidst an extended period of limited funding.
Despite securing $50 million in a Series-C funding round nearly two years ago for expansion across Kenya and neighboring countries, the company is now focusing on an assertive approach to curtail expenses.
Founded in 2013 by Njonjo and Grant Brooke, Twiga Foods has revolutionized the agricultural sector by creating an efficient supply chain for high-quality produce, benefitting Kenyan farmers and vendors.
The company operates a cashless mobile B2B supply platform, connecting numerous small- and medium-sized vendors in urban areas across Africa.
Njonjo, CEO of Twiga Foods, confirmed that the company is striving to slash its overall operational costs by up to 40 percent. This includes a workforce reduction of approximately one-third of its permanent staff by the next month.
Njonjo clarified that this endeavor is not solely about downsizing personnel but also about streamlining general expenditures. The objective is to demonstrate that the company’s operations can be maintained at significantly reduced costs.
This shift is partially driven by the integration of modern technology, which has rendered some labor-intensive roles obsolete. Njonjo disclosed that out of the total workforce of 810 employees, 267 individuals have already received redundancy notices. He assured that the redundancy process adheres to ethical standards and established procedures.
Njonjo highlighted the role of technology in this transformation, exemplifying it with an optic sensor installed at the Taveta farm. This sensor facilitates sorting tomatoes based on color, allowing efficient separation of ripe and unripe produce.
Twiga Foods recently terminated 130 sales agents as part of its strategy to counteract intensifying competition in the food delivery industry. This competition has significantly impacted the company’s revenue streams.
