Jumia Group is undoubtedly the leading internet group on the continent. Buoyed by investments from Goldman Sachs, Millicom, Orange, CDC, MTN, and other investors, the Group has been bullish on what many had called the dark continent. (See also: M-Kopa, Jumia Among MIT 50 Smartest Companies of 2017).
However, this seems to be coming at a huge cost. News reaching us is that Jumia classifieds' ventures will shift operations of Ugandan market platforms to Kenya, starting this Friday.
This comes after the venture served all its employees with letters terminating their contracts.
The communication was made by the country manager, Stefano Polimeno, who took over from Shakib Nsubuga in March this year.
In a letter, a copy we got ahold of, Stefano cites "a high level of spend" and "the need to reduce operational costs" as the reasons for terminating the employees' contracts. The full letter reads;
RE: NOTIFICATION OF TERMINATION
In reference to the above, this letter confirms our discussion that you are laid off from your employment with Jade E-Services - classifieds Uganda effective November 10th 2017.
Currently, there is a high level of spend, therefore, we need to reduce operational costs and business. Unfortunately, the current expenditure in Uganda is also too high compared to the volume of sales we are achieving.
As a result, Jumia Classifieds is downsizing and restructuring all departments in line with the new strategy and reduction in budget.
As of your employment contract;
You'll receive one month's full pay with this notice.
You'll be compensated for the remaining leave days you have not yet accrued
In return, prior to exiting the firm, you will return to Jumia;
The Jumia owned laptop loaned to you to carry out company work
The Jumia owned mi-fi loaned to you to carry out company work (if applicable)
Any other Jumia owned devices and properties
We want you to know that this layoff is not a statement about your work for Jade E-Services. You have been a dedicated, contributing employee.
If you wish to speak on your behalf to potential employers, we shall be happy to do so.
Please let us know if we can assist you during your transition.
We wish you well in your future endeavors.
[caption id="attachment_2937" align="aligncenter" width="2064"]
Picture of the letter terminating the contract of one of the Jumia Classifieds employees.[/caption]
Four employees out of the 10 as of March this year have left the venture to pursue their own endeavors. None of which has got replaced to date.
If this happens, this Friday, it means the 6 people that have been remaining and directly employed by Jumia Classifieds in Uganda stand to get unemployed.
It should also be noted that earlier this year, One Africa Media Group's BrighterMonday and Cheki closed shop in Uganda. All these were classifieds platforms one of which - BrighterMonday - was directly competing with Jumia's Jumia Jobs.
Yet, the fact that classifieds ventures are scaling back from the Ugandan market should be a point to ponder.
But, all this is happening as Taxify - a ride-hailing platform - has just launched in the country. (See also: Is this Why BrighterMonday Closed the Ugandan Office?).
Before you go, we have a clarification to make
Earlier today [11/08/2017], we erroneously reported that Jumia Classifieds Uganda was closing operations in Uganda. The article also pointed out that the e-commerce arm of Jumia in Uganda was depending on the performance of Jumia Market. Otherwise, it was closing in December this year.
In a meeting with the management of Jumia in Uganda, they clarified that Jumia Classifieds platforms will continue to operate - though managed from Kenya. They also informed us that the e-commerce platforms are not closing. We trusted a source that turned out not to be well versed in the matter.
We deeply regret and apologize for that mishap and damages it may have caused. But, we remain committed to giving you truthful, fact-based and well-researched startup information in Uganda and Africa. [End]