M-Kopa Solar fires 18% of its staff including all developers, outsources work to a foreign company

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Kenya based pay-as-you-go solar provider M-KOPA Solar has fired undisclosed number of staff including 78 of its developers in the country. According to people familiar with the matter who requested anonymity, the developers work has now been outsourced to a foreign company called Applicita that is said to be owned by the company’s new CTO.

The exercise, which was completed in December saw a number of guys sent home who used to handle critical IT functions like; engineering delivery, data analytics, business intelligence and platform operations. Some of the developers who fired were absorbed by Safaricom according to the source.

We sought comments from the company’s CEO and Co-Founder Jesse Moore, who confirmed the layoffs and explained that they were necessary due to rising costs of technology and there was need to generate profits and give returns to investors.

“I can confirm that we completed a restructuring process in December 2017. This was done to reduce fixed costs and keep us on the path to profitability. Overall, the company reduced headcount by 18% covering all departments and all levels in Kenya, Tanzania, Uganda and UK. We are outsourcing more of our technology work, maintaining a smaller in-house team to work directly with outsourcing partners in Kenya and overseas.” he noted.

He went on to say that this was the right thing for the company’s long-term sustainability, “This means building a sustainable, profitable company that offers impact for customers and returns for investors.”

On whether the company had outsourced the IT services to a company that is linked to the new CTO, this is what he said.

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“In mid-2017 our Acting CTO was seconded to us from one of our outsourcing partners, when our previous CTO left the company. Our board approved this and the individual is strictly recused on procurement decisions with companies where could be a potential conflict of interest.”

The company was started by Nick Hughes, an Englishman, and his Canadian co-founder, Jesse Moore. Hughes is a former executive at Vodafone, while Moore was working for the GSMA Development Fund, a mobile telecommunications industry group, where he was in charge of identifying opportunities to make mobile services available to people in developing countries. M-kopa is one of the best-funded startups in Africa having raised more than $152 Million since inception in 2011. However, a big chunk of this financing is in form of debt.

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