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Why agritech startup Twiga Foods is terminating some of its staff

One of Kenya’s successful agritech startups Twiga Foods has been in the news in the past two days for terminating the contracts of some of its workers.

Twiga has fired 130 sale agents in since May. However, the company made it clear that the staffs were let go because of the poor performance of the staffs.

Many had touted possible financial crisis at the model agritech startup that has revolutionized fresh food delivery in Kenya in the last three years.

Notably, the workers who were let go are categorized as ‘independent sales agents’ meaning that they may not have been fulltime employees but contractors paid on retainers and commissions.

The company’s CEO Peter Njonjo told the Business Daily that they were retaining agents bringing value to the company.

Twiga Foods, like many other companies post-Covid19, had in late 2022 adopted a model where they employed some of the staffs on contract basis. At the time, the startup terminated the contracts of fulltime employees and rehired some of them on contract.

At least 221 workers were terminated in the process. 117 were rehired, while the rest chose to pursue different interests. The company then hired more agents to bring the total to over 400 staffs on commission and reward basis depending on the performance.

We had a total of 440 agent territories, of which 50 were inactive. Making a net of 390, of these 130 were performing below expectation and were rationalised.

~ Peter Njonjo, CEO Twiga Foods.

The commission-based model is popular with banks and insurance companies but is fast being adopted by other industries who rehire staff as consultants instead of fulltime workers.

According to Mr Njonjo, active sales agents can earn commissions of up to KES 30,000 per week while inactive ones earn as little as KES 2,000. In view of rising competition in the foods market, Twiga Foods says it is keen to offload the inactive staffs.

Twiga Foods has raised KES 17 billion in various series of rounds since launching.

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The Lead KE is a web communications service based in Nairobi, Kenya. We offer in depth articles and news on technology, business, travel, culture and climate. The blog mainly covers Kenya and the East African region. Send queries, press releases and tips to theleadkenya@gmail.com