Vendease, a Nigerian food procurement startup, has let go of 9% of its workforce, or 27 of its almost 300 staff, this week. The startup confirmed to TechCabal in a statement that the decision to adjust its headcount was made to address performance-related issues and was not related to the current global economic downturn.
Present in eight cities across Nigeria and Ghana, Vendease raised a $30 million Series A round in September this year. The startup said that this funding would be used to deepen its presence in these cities and expand to new locations. From the outside, it seemed like the startup was thriving and was on an upward trajectory.
On a call with TechCabal, Tunde Kara, the CEO and co-founder, affirmed that there were no economic considerations in making this decision. The startup in a statement confirmed that the move was made to let go of employees who were not contributing their fair weight. According to the statement, the startup has grown its workforce by almost three times in the last 12 months and has also seen a 200% increase in the number of users on its platform (which amounts to 3,000 users) within the same time. He added that the startup has also seen its revenue grow by five times since last year.
“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 startup measured performance and decided to let staff go because of performance issues, the startup said, “All of these former employees had been on performance improvement programmes for months (some for over a year) and we had made various attempts to support their improvement.”
Kara, however, explained that out of respect for the outgoing employees, the startup did not want to disclose the reason for letting their staff go. “We are very big on people, and people are what has gotten us here. We did not want to include it was performance-related because even if you don’t perform at Vendease, you can go elsewhere and perform.” He added that the decision to include this in the statement was made because “we started seeing statements that it was impromptu and that’s not what happened”.
Amidst a global downturn in funding and increased pressure from venture capital firms on startups to turn a profit or increase profits, several companies have let go of their staff. A data platform that has been tracking layoffs since the pandemic estimates that 853 companies have laid off 137,492 employees this year alone.
According to the statement, Vendease is currently in the process of recruiting staff to replace the outgoing employees. “We are already in the process of actively recruiting suitable replacements for many of the affected roles, and we are looking forward to continued growth and profitability for Vendease as we make it easier for African food businesses to access supplies, financial services, and other support they need to run the most successful businesses.”