A few days after we reported that Gokada was looking to raise $100,000 through crowdfunding, TechCabal can now exclusively report that Gokada has laid off at least 54 members of staff. Four present and former Gokada employees who spoke to TechCabal said the email announcing the layoffs was sent on Tuesday night. A copy of the email which TechCabal saw reads, “I regret to inform you that you have been affected by the reduction in our team effective Tuesday, January 31, 2023. We will not be making any further payments in respect of this change in your status with us. However, we will ensure that your salary for the month of January is processed before the end of the day.”
Despite the first part of the email clearly stating that this was a layoff, the remainder asked staff members to “forward their resignation via PeopleHum” before the end of the day. A Gokada employee who spoke to us anonymously said that they were asked to resign so that the company could save face.
Tosin Oni, Gokada’s CEO, confirmed the layoffs but declined to say the number of people fired. He told TechCabal, “the layoffs affected people across the organisation. We’re in a tough macro environment, and Nigeria has worsened economically. We’ve not been protected from that, and [these layoffs] are about trying to operate more efficiently.”
Cutting cost to extend runway?
In a January 27 article, TechCabal asked why Gokada was trying to raise $750,000 (the company later amended the amount to $100,000) from retail investors. It was an unusual move for a company that had raised $5.3 million from VCs in 2019. It’s possible to infer that the company was having trouble raising money from investors, but Gokada declined to comment when TechCabal reached out.
Three current and former employees told TechCabal about the company’s struggles and said that at least 54 people were fired in Tuesday’s layoffs. All affected employees worked in operations as Gokada’s team of around 2,500 riders remains intact. One person told TechCabal, “The quality assurance and driver relations teams were all laid off. On another team of 11 people, nine were also laid off.” They all say that the company’s struggles began in October 2022.
Belt-tightening began in November 2022
Another employee who asked to speak off the record for fear of reprisal said, “When I joined in October, it seemed like everything was going well. The company provided lunch every workday and airtime for us every week. But we heard a few whispers from old employees.”
On November 14, the company emailed employees to attend a town hall meeting in person. One source at the meeting shared that the CEO said the company had two options: close down operations and ask everyone to go or lay off staff. In the end, the company chose to fire some employees.
“It was at the town hall that the CEO announced that some employees would be laid off. The CEO said the company would have to reduce spending and cut luxuries. At some point, we weren’t buying diesel at the office; whenever IKEDC cuts power, we wait for them to restore it instead of turning on the generator.” Two other Gokada employees who spoke to TechCabal confirmed this version of events.
While Oni did not comment on the specifics, he told TechCabal, “The focus has always been efficiency, and we figured the places we need to trim, and we’ve gone after those. It’s all about getting the organisation to operate more efficiently. Every single thing we’ve done is focused on efficiency.”
Gokada layoffs began in November 14, 2022
Several sources say 20 employees were laid off in November. Another source told TechCabal that after the layoffs, the CEO told the unaffected employees that the company was now in an excellent financial position and could survive, come what may.
Oni disputes this. “My words then were that we’re a growing startup, not cashflow positive. You get efficient, or you don’t survive. It wasn’t a ‘take a pay cut or go home’. We’re a startup and not making money; people need to understand that. The focus is efficiency. That some people got the idea [after the first round of layoffs] that we can now calm down is strange. Those that remained [after November] were not out of the woods. We have to respond to the economic reality.”
And true to his prediction, the company conducted another round of layoffs On January 27, 2023. Employees were invited to a virtual meeting on Tuesday at 4:30 p.m., where they were told there would be more layoffs. Three people who attended the meeting said they could not ask questions. At 8:30 p.m. on Tuesday, several employees got emails terminating their employment.
Two sources told TechCabal that their biggest concern with the layoffs was how they were conducted. They say there was no empathy from the company and they felt like they were kicked to the curb. Tosin Oni told TechCabal, “This process is never easy. When you’re reducing the size of the team to let the company survive, it’s never easy. There’s no perfect way, and there are always places where improvements can be made. But it’s difficult all around.”