In October 2022, Kenyan logistics startup Sendy conducted a second round of layoffs, affecting 20% of its remaining staff, or 54 employees. This move followed a previous round of layoffs in August 2022, where the company cut 10% of its workforce. Sendy, which offers e-commerce, enterprise, and freight delivery services, has faced funding challenges due to macroeconomic headwinds. In this article, we'll discuss the reasons behind these layoffs and their potential impact on Sendy's future expansion plans.
Sendy's decision to conduct layoffs can be attributed to a combination of economic pressures, shifts in industry demands, and internal restructurings. The company discontinued its Supply service and faced a funding slowdown due to macroeconomic headwinds, failing to raise the $100 million it had targeted for the year.
As a result, Sendy pivoted to cater exclusively to businesses, focusing on its Fulfillment service to provide streamlined services for its clients. Sendy CEO Meshack Alloys acknowledged that the company was far off from its projections and needed to make changes to meet future targets. These layoffs are part of a troubling global trend, with companies like Robinhood, Gemini, On Deck, and Hopin also experiencing layoffs.
Following the layoffs, Sendy is likely to experience cost reductions and adapt to the changing market conditions. The company has discontinued its Supply service and is now concentrating on its Fulfillment service, which offers storage, packing, and delivery of goods for online merchants.
This strategic adjustment positions Sendy to better support its business clients and optimize for continued growth. However, the company has also halted its expansion into Egypt and South Africa, indicating a more focused approach to its existing markets.
The impact of Sendy's layoffs on the logistics industry may lead to potential shifts in market dynamics and competitive landscapes. As companies face economic challenges, they may need to adapt their business models and strategies to stay competitive. In the case of Sendy, the focus on its Fulfillment service could lead to a more streamlined and efficient offering for business clients.
Competitors, such as Kobo360 and Lori Systems, may take advantage of the situation to gain market share or face similar challenges, leading to cost-cutting measures. The industry may also experience consolidation, with smaller players being acquired or going out of business, resulting in a more concentrated market with fewer players.
Sendy's layoffs stem from economic pressures, industry shifts, and internal restructuring, leading to cost reductions and a focus on their Fulfillment service. This move may impact the company's future growth and industry standing, while also influencing market dynamics and competition. The broader logistics sector could experience consolidation and adaptation, with companies like Sendy needing to evolve to stay competitive. These developments may prompt Sendy to explore new strategies and opportunities in the future.
