NAIROBI, Kenya, Nov 23 – Agri-tech firm Twiga Foods has said the decision to fire its employees was necessary due to a shift in the company’s business model which required the sales team to function as the company’s entrepreneurs.
According to the firm, the business model was altered to permit the establishment of independent agents, who will own certain portions of the market, interact one-on-one with consumers, and generate revenue from their sales. Previously, the sales force was paid a fixed wage.
Peter Njonjo, the Chief Executive Officer of Twiga Foods, said that the company had converted all of its trade development representatives to agents as it shifted its business practices for its sales force to an agency model.
“The number of people we had as the sales team was 211, today the people we are onboarding are close to 400 people. The number of people who have shown an interest to become agents is close to 3000 people, by March of next year we want to ensure the number of people we have working with Twiga is in excess of 1000,” he said.
“So, when you look at it, it was more around a change in the business model and for that change to happen we created redundancies of the 211 salespeople because that is what the law requires when you are transitioning from being an employee to being an independent agent and that was the transition we had to make.”
Njonjo, however, said that the same individuals were given the first option to join the company as agents.
He observed that during the previous month, there was a huge increase in the number of agents earning more in commissions than they were in salaries.
“This is also about creating opportunity, creating entrepreneurship, and allowing people to be their own boss. The way to think about is like an M-Pesa agent who offers the services for Safaricom but the reality is they are not employed by Safaricom they are entrepreneurs,” he said
“What we have basically done is to transition from a model where sales agents are internal employees to where they are external agents.”
After investing Sh1.6 billion to expand its business, Twiga Foods reduced its employees in ways that would cause those who remain to forfeit some of the perks they have been receiving.
In October, the firm stopped working with expatriates who were providing various services across multiple departments.
Additionally, Twiga reduced the staff per diem for the remaining employees from a high of Sh4,000 to Sh1,000, where accommodation was offered on a bed and breakfast basis in a single room basis.
According to Njonjo, those who wouldn’t have accepted the appointment as agents won’t be forced to serve as trade development representatives during the one-month notice period provided to allow them to look for alternative engagements.