Jumia Continues E-Commerce Downsizing With Closure In Tanzania, Layoffs In Kenya
After deciding to close its business in Cameroon, Africa-focused e-commerce firm Jumia has done the same in Tanzania, leaving it operating in 12 African markets.
The New York Stock Exchange-listed e-commerce firm is also laying off staff in Kenya as it continues to reduce costs in its e-commerce operation, according to Weetracker.
Jumia’s stock price decline heavily since a New York IPO in April 2019. After initially jumping to almost $47 a share – three times the listing price of $14.50 – Jumia shares started falling after data-misrepresentation allegations emerged by Citron Research, a known short stock seller.
Jumia cutting e-commerce costs
Around 30 Jumia employees in Kenya have been laid off, representing 6 percent of the company’s roughly 500 staff in the East African country, GadgetsAfrica reports.
Two weeks after Jumia’s decision to close its operations in Cameroon, Tanzania suffered the same fate.
“As part of our ongoing portfolio optimization (what does this mean?) effort, Jumia has come to the difficult decision to cease our operations in Tanzania effective on November 27,” the company said in a statement.
The Tanzanian shutdown and job losses in Kenya are in response to pressure from Jumia’s investors to cut down on the loss-making company’s running costs and arrest continuing losses, Weetracker reports.
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Jumia has only 12 African markets after the closures of Cameroon and Tanzania.
In December 2018, French drinks company Pernod Ricard SA bought 5.1 percent of Jumia for around $84.2 million, valuing the e-commerce firm at around $1.5 billion and making it an official tech unicorn. That valuation rose to $1.9 billion on the first day of trading in New York.
A steep decline in its share price means Jumia has lost its unicorn status.
Shares fell below the IPO price in August, losing 35.6 percent of their value in July alone, according to data from S&P Global Market Intelligence.