In the latest development, Gokada, a logistics and delivery startup, has laid off 54 employees, a move confirmed by the company’s CEO. This comes just months after an earlier wave of layoffs in November 2022. The affected employees were notified via email, which stated the termination of their roles effective January 31, 2023, and included a request for them to resign formally to facilitate the process.
Financial Struggles and Operational Adjustments
The layoffs are part of broader efforts to streamline operations amidst challenging economic conditions. Gokada’s CEO cited the difficult macroeconomic environment in Nigeria as a significant factor influencing the decision. He explained that the company needed to optimize efficiency to ensure its survival.This announcement follows reports of the company seeking to raise funds through a crowdfunding initiative, aiming to secure $100,000. The unusual nature of this fundraising effort raised questions about Gokada’s financial stability, particularly as it had previously raised $5.3 million from venture capital investors in 2019.
Workforce Reductions
The recent layoffs primarily affected employees in the operations department, excluding the company’s team of riders. According to sources, entire teams, such as quality assurance and driver relations, were dissolved, while others experienced significant cuts. Reports suggest that the company’s financial challenges began surfacing in late 2022, leading to gradual cost-cutting measures.In November 2022, Gokada held a town hall meeting where employees were informed of potential layoffs as part of efforts to cut costs. Measures such as reduced office spending and curbing operational luxuries were implemented. Around 20 employees were laid off during that period.
Employee Concerns
Former employees expressed dissatisfaction with the handling of the layoffs, describing the process as lacking empathy. Many felt that the company’s approach left them feeling undervalued. Despite this, the CEO acknowledged the difficulty of the decision and emphasized that such actions were necessary for the company’s long-term viability.
The layoffs underscore the challenges startups face in maintaining operations during economic downturns. For Gokada, the focus remains on achieving efficiency and navigating the realities of a tough economic climate. As the company continues to adapt, the impact of these decisions on its operations and reputation remains to be seen.
