Top of mind: Happy Sunday!
I’m afraid this week’s news has more layoff stories than triumphs. 2022 has been the year of reckoning for tech companies globally.
One thing’s for sure. I’m happy that Twitter’s employees are standing up for themselves despite Elon Musk’s toxic reign. That is good news.
Let’s get to it.
3 big things:
- Elon Musk tried it
- Quidax layoffs
- Jumia’s going lean
Twitter Africa’s team will not be bullied by Elon Musk
The short: Ghana’s laid-off Twitter employees demand equal treatment as their western colleagues from Elon Musk.
False promises: Following Elon’s decimation of Twitter, only one staff member was left standing in its four-day-old Africa headquarters in Accra, Ghana. The email sent to the employees in the Ghana office said the laid-off employees would receive full salaries and benefits for the 30-day notice period until December 4th.
Unlike their US and European employees, Twitter mentioned nothing about severance pay or benefits. Employees began trying to reach Twitter with no luck. Twitter attempted to ghost the continent until the news broke on CNN, and then they grudgingly sent an offer.
A lousy hand: Twitter reportedly offered their Accra employees only one month of severance with “vague” benefits, contrasting Elon Musk’s tweet about laid-off employees receiving three months of severance.
Employees fight back: The African employees hired a lawyer and demanded that Twitter adhere to Ghana’s labour laws by giving them additional severance and the same benefits as the other laid-off employees. They also petitioned the government through a letter to compel Twitter to make good on its promises.
They are demanding three months gross salary as severance pay, repatriation expenses for non-Ghanaian staff, vesting of stock options provided in their contracts, and other benefits such as healthcare continuation offered worldwide.
Twitter has now agreed to negotiate.
Final thoughts: Elon tried it, but Twitter’s Africa team fought back. It’s a desperate time for tech companies, and I understand that layoffs are crucial for survival, but Twitter’s lack of grace is ruthless for my taste.
Big props to Twitter’s African team for refusing to be bullied.
Quidax lays off 20% of its workforce
The short: Nigerian crypto startup, Quidax laid off 20% of its staff. No surprises.
Hay days: Quidax has raised a total of $3.6 million, with the latest $3 million coming via the public sale of its QDX token. They gained popularity after spending millions of dollars earlier this year on celebrity endorsement deals and TV sponsorships for Nigeria’s Big Brother show, leading to overwhelming website traffic from over 25 countries, which crashed the website for a brief period.
Crypto winter: Quidax said in a statement that the impact of the FTX bankruptcy on the crypto industry and the general dip in crypto over the past few months forced its hand. The company started by slashing salaries in August and transitioned to laying off 20% of its workforce.
We’ve observed what’s happening with the global economy and we know that now is not the time to just chill and see how things go. Instead, it’s time to be proactive. Our priority is making sure that even if things get worse globally and in the crypto market, we can weather the storm and still provide value to our customers. As a result, we’ve had to scale down a couple of things, including our workforce.
Final thoughts: It’s been tough for crypto startups on the continent, made even worse by FTX’s crash. Sam Bankman-Fried has another casualty on his hands, and I hope he’s made to account for his crimes.
Jumia’s going lean
The short: Jumia is sunsetting its products and changing old leadership.
No money, new leadership: Jumia’s not turned a profit in the last five years and has taken a bad beating at the stock market – despite its reputation as Africa’s first publicly traded company on the NYSE.
The board was unimpressed and decided to bring in new management ten days before Jumia’s third-quarter 2022 financial report, forcing co-founders Sacha Poignonnec and Jeremy Hodara to resign from their positions as co-CEOs.
Francis Dufay, the former CEO of Jumia Ivory Coast, is now the acting CEO. During the earnings call, Dufay explained that the supervisory board decided to switch things up for more focus on profitability.
By the numbers: There’s a positive trend in the books. In Jumia’s third-quarter report, their adjusted EBITDA losses were cut 13% from $52.5 million to $45.5 million, their lowest level in six quarters, while their operating loss dropped 33% from $64 million to $43.2 million.
Like other international companies, and even more so being Africa-focused, Jumia is facing losses due to local currency devaluation in its key markets, including Nigeria, Egypt, and the Ivory Coast.
The effect is obvious, with its revenues for the third quarter of 2022 coming in at $50.5 million, which would have been $56.6 million if all currencies had remained stable this year.
New focus: Jumia will make critical changes to its product offerings to free up resources for more worthwhile ventures. It will restrict its logistics-as-a-service platform to Nigeria, Ivory Coast, and Morocco and its First Party grocery e-commerce to Nigeria and Ivory Coast. In addition, its subscription-based delivery service, Jumia Prime, has been paused indefinitely.
Final thoughts: Jumia’s renewed focus on profitability may turn the tides on the NYSE for Africa’s flagship stock. They’ve taken a beating the last five years, and hopefully, their new leadership will provide the change they desperately need.
That’s it for the week! I’d love to hear your thoughts about this week’s issue. Please respond to this email or find me on Twitter @fatuogwuche 🙂
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See you next Sunday!