• Thursday, 13 June 2024
Copia announces plan to cut 1,060 jobs due to financial constraints

Copia announces plan to cut 1,060 jobs due to financial constraints

Kenyan e-commerce start-up Copia has announced that 1,060 jobs are at risk of redundancy due to financial constraints as the venture struggles to secure additional funding.

The business-to-consumer (B2C) company was founded in 2013 by former Silicon Valley maestros Tracey Turner and Jonathan Lewis and it provides a platform for rural, middle to low-income consumers to order products that are delivered at their convenience by agents.

In a letter to staff dated May 16, Copia said it has opted for drastic organizational restructuring as it tries to get capital to sustain operations.

The venture also warned of a looming shutdown if its financial challenges persist.

“Despite our best efforts to navigate this challenge and explore avenues for additional funding, we find ourselves in a position where we must consider a far-reaching organizational restructuring to ensure the sustainability of our operations or even a possible shutting down of operations,” said the start-up.

“While we are working hard to try and overcome the hurdle, it is important to highlight that uncertainties lie ahead. As a result, it is very likely that there will be a reduction in our workforce and it is possible that the payment of salaries could be at risk.”

Copia gave a one-month redundancy notice to staff per local labour laws.

“If the company implements a restructuring, about 1,060 roles could be eliminated from the company's structure… If operations are shut down, all staff will be at risk of being terminated,” it said.

Copia’s model comprises digitally-enabled, locally-based agents who operate as order and delivery points to meet consumers where they are, online or offline.

The agents are existing trusted shopkeepers like a local grocer or butcher, where customers can select and pay for products chosen from a Copia catalogue. 

Once a customer places an order, Copia sends an SMS order confirmation to both the agent and the customer and in two days, Copia delivers the products to the agent for customer pick up.

The announcement comes just five months after the start-up announced it had secured Ksh.2.6 billion ($20 million) in a Series C extension round led by Enza Capital.

Other participants in the December 2023 round include global private bank LGT, investment firm Goodwell Investments, the U.S. International Development Finance Corporation (DFC), German financial service provider DEG, Swiss impact fund Elea, Perivoli Foundation and Sorenson Foundation.

Copia had in July last year laid off about 25 per cent of its workforce, affecting about 350 of its 1,800 workers at the time.

The start-up then said the economic downturn and the constrained capital markets had forced it to undergo an operational restructuring.

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