Just in. In a manner that is oddly unusual, at least by industry precedents, Konga has officially announced the laying off a sizeable chunk of its workforce.
Konga.com, will lay off some of its employees, as part of its business development strategy whereby it reviews staff strength every 6 months. Konga has been doing this consistently over the last 2 years and usually let go of staff that still go on and do great things elsewhere.
The condescending way of saying âYouâre Fired!â 
This is to help your self-esteem. The biggest problem I faced when I got laid off was that feeling of not being good enough. It was terrible but came out the other end okay. Konga is a great place these days to hire world-class talent from.
But i dont understand this Business Development Strategy of Firing people every 6 months, i mean why did u even hire them in the 1st place? or didnt you know that the country you operated in will have a recession or a bullish period?
They keep finding excuses, Salary is eating into revenue so reduce head scale YET Customer service and experience is terrible, are they propping to make revenue numbers look Good for investors so they can sell out completely? who knows.
Then the part of focusing on only product segments that recieve high numbers means very soon some products will be shifted to marketplace and they sell the juicy ones and more updrive.
Again the focus is on Short term gain than Future building.
For a company that sees the Amazon/Alibaba as a model to follow havent really looked at the company that focused on building the market first than profit, but well na dem sabi.
The space needs another big player to shake the tree because the Big 2 are too comfortable.
Why not just hire students looking for SIWES placements?
Since they will leave voluntarily after six months.
Reason why i dont get the strategyâŚFiring people to reduce overhead is nothing new Everyone does it as a way of keeping cost especially during economic crunch but then again this is something that should be projected.
Techcabal announced that they are hosting a conference call tomorrow to discuss Kongaâs (lead?) investorâs Q2 report.
A quick perusal through the report shows that theyâve marked down the value of their investment twice. I suspect itâs a combination of the devaluation of the naira and a systemic drop in consumer confidence. Nobody wants to mark down their investment twice. With that kind of pressure on the management, if you arenât in R & D or a top sales driver, your job is at serious risk. Unfortunately, itâs only going to get worse leading into 2018. 
Thats my point, where this people hired for long term or just because they needed hands? which goes back to Management strategy in the first place.
Investors put money for myriad of reasons chief of which is a gamble that this Market will pay off in xyz years, it might be they were promised 5 yrs 2x value of investment without planning for sharp drop in consumer purchasing habits if economy dwindled as we are currently facing.
I understand from a Mgt perspective need to reduce overheads, i co run a startup, we have had to hire for need for long term and wear multiple hats for the rest and will keep it that way till when things let up.
Customer Acquisition for them has been major of 2 Things: Customer Experience from Ordering on Site to Delivery and Smart Marketing, they have a horrible but slightly better lead than Jumia in customer experience and customer service which with the frequency of angry tweets, calls and posts needs to be where major focus should be, building a customer centric online retail store than a lets copy what Amazon did model viz a viz, Kongapay, Konga Express, Konga Warehouse, Konga sellers HQ et al while not bad ideas still eats into Overhead and operations which could have been outsourced to others and then retained when they have truly scaled across Africa, their ompetition is in like 8 countries so far and they should by now have scaled into Benin republic even!!.
As for Smart marketing, the Many billboards they buy hasnt affected marketing considering Mobile and Activations and Partnerships convert far better.
Konga had this Sellers Market event that was a big boost for them in previous years wonder why they stopped? Jumias Jforce is a very nice idea to create sales agents to sell or drive user adoption online as lots of cash have to be spent on user education or adoption to get more value .
Again Kinnevicks report shows the True Strategy behind the Layoffs, There have been misgivings and Management has to proove they are financially sound, what better way than to lay off? why is it that the first thing Managers like doing is lay off when salary restructure can be done and a serious internal strategy meet to deliver more growth, CLV and CAV ?
The fact they say its a Business Development Strategy kinda ticks me off.
Wish them well but hey maybe Management needs to be hungry to flip the Ecommerce market no? they are too comfortable.
The first lesson you learn working in a high-risk venture like e-commerce where margins are razor thin is that your job isnât anywhere close to secure, itâs the same in Nigeria as it is in America, there is a New York Times article here that scathes Amazon and its HR practices. Itâs tough and any entrepreneur knows, human capital costs are the biggest recurring expenditure and the easiest to cut, itâs a quick fix.
I think sometimes you just catch a bad break and a combination of factors just turn against you and thatâs where Konga is, the signs were there for those who wanted to see. The first is the market, there is a glass ceiling in the addressable market where active internet users intersect users with disposable income, Konga has way more users than the report shows but the demographic with active internet access donât have much disposable income and in the current recession, disposable income is drying up and coupled with the other issues of trust, payment and logisticsâŚits not looking rosy now but the future is bright, they only need to weather the storm.
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If your venture ever hits stormy weather and you need to cut costs to survive, it is better to lay people off early and quickly than try to be honorable and propose salary cuts. Its the toughest spot for any entrepreneur to tell people whom he had asked to be part of his vision and journey to leave but like a life-saving surgery, it needs to be done.
In my startups, we needed to hire two marketing execs, we went to the field and realised that our budget would not meet the market value of what we wanted.
We typically wanted to pull someone who had 7-10yrs in the commercial banks for the position.
By the time we returned from the field, we had to contract our 10yr budget to a 4yr budget to enable us hire these execs.
What do you think will happen if they donât achieve individually sustainable results in 4yrs?
This also happens with entry level employees.
You need trainee level staff. You need them to be computer aware, own laptops etc. You realise you have to pay at least 100k/month If you are going to get the best match.
But your timeline/budget implies reducing their engagement period from 1yr to 6months i.e. I can either pay 50k.month for 1yr OR 100k/month for 6months.
So its not like most companies wake up and remember they have to lay off.
They know from day one. If over that period the results improve to a point where there is a sustainable budget, then great.
Also, sometimes employment is based on project.
Eg. I am launching a new product and I need more hands to help with the roll-out.
In a sane society, you would get those hands on contract and you would get a satisfactory output.
But in Nigeria, the contractor will focus on biting into the wages that you would experience a 15-30% erosion of those wages plus owe them salaries and net value of the contracting process is 25-45% reduced workforce productivity.
What would you rather do?
Not bring them in because you would have to let them go after 6months?
Instead of laying people off, first try to see if they can spin off some ideas within the company maybe? It might be distracting but itâll be something like Amazon and AWS. I see theyâve done Konga Pay, maybe find some other area?
Their âBusiness Developmentâ gimmick is a way of saying âHey, we need to cut our losses and bring it to the barest minimum.â They are going to be fine in the end, I think.
The Fact is they were paying very high fees for salaries as a Startup , even though they had lots of money from investors , targets made were not achieved and now they are cutting cost, in my opinion the blame is on Management lets not try and sugar coat things, From day 1 they have not acted as a startup should which is more about Growth Year on Year.
Same way market might be bad, it can be good hence you create a balance, you hire only when you really need to hire and i mean really need to hire. A current staffs salary can be increased and his workload increased which is first offered to him if he can take that responsibility on. In Business, Salaries and Operations( Marketing and Core production) do take a heavy chunk of revenue of companies and hence being Lean in Staff but meeting Targets helps offset cost.
The General rule is from Year 1-3 you should as a startup get people to have multi functional skills then later hire specialist for roles.
Hence, i am quite surprised that they are laying off staffs every 6 months as a STRATEGY, i mean that is the clearest sign that all is not well.
We definitely know the Market is never easy but it doesnât stop us from creating new revenue streams by providing what people actually want.
They will be fine but its a big lessonâŚBe Lean and Grow
He who wears the Shoe knows where it pinches most.Assumptions can only be made,only those behind the decision know the factors responsible for it,and for all I know: put half of the commentators on this thread in the same position as Konga management members,and we will take the same action.
Everyone has to realize the Economy is in a bad state, practically in recession: in a crunched economy, its only common sense that jobs will be lost.
High salaries you say? How high is N150k - N200k in USD?Less than 1000usd.Talk about multi tasking staffs, what do you think is the reason behind lapses in customer care? Isnât it usually because the team is overtasked.How do you multitask an already overtasked worker?
Letâs get real,they probably took the best action,and knowing fully well:that in our clime,the top hierarchy never takes responsibility for poor resultsâŚthe lowerend workers are the scapegoats.
Afterall even the govt. Leads in that trend.Havenât you heard your Federal ministers telling poor masses to cope with the brunt of â16 years of bad leadershipâ like they were responsible for it in the first place?
Konga has fired staffs,meanwhile state governments are owing⌠Ironic!
Fresh off the press - Amazon reaches new high of 268,900 employees â skyrocketing 47% in just one year
Itâs wierd how the world seems to be moving forward and we (and Venezuela) seem to be the only ones in a chronic recession. With all this going on, some people are still padding the budget with money we donât even have. Na wa o. Which way, naija?
Well, technically they were responsible. They voted bad leadership for a cup of rice. But thatâs another conversation entirely.
I think most of you are reading this statement all wrong. They are making two points:
Every six months they review their OVERALL staffing levels and decide who needs to be let go (depending on their internal metrics). Who they let go might be a recent hire or a long timer.
By saying âwe do this all the timeâ, they are signalling to investors and others in the public that this move wasnât made out of financial distress (whether you believe them or not is a different story)
If you need to conduct layoffs every six months, your hiring/talent acquisition process is faulty. No need for euphemisms/sugar-coating.
Investors donât like to see talent pass through your firm like a bus stop.
They might unintentionally be shooting themselves in the foot by sending such signals.
Yea⌠like our votes counted in the first pace⌠like u saidâŚdiscussion for another day