Mxit scaling down “non-core expenditure”, staff offered redundancies

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South African mobile messaging app Mxit, which also has operations in Nigeria and India, has said it is scaling down on “non-core expenditure” and may downsize “business support functions”, with a number of employees offered voluntary severance packages.

Announcing that it plans to place a greater emphasis on “mobile social services that inspire and improve lives”, and saying it has helped more than 88 million users over the past 10 years, Mxit nevertheless said it was downsizing some operations.

“In December new updates will be released across all major operating systems with improvements to features and functionality,” Mxit said. “To improve and enhance the development of these services, the company has also arrived at the preliminary view that, where possible, it needs to scale down on non-core expenditure that does not materially relate to essential operations.”

The company said the “strategic change in direction” would not affect its users, partner organisations or advertising clients.

“Some business support functions may however be downsized, and in some cases externalised to give the company more flexibility to engage resources as and when required,” Mxit said.

“Although a final decision has not been taken, many employees share this view for the future of the business, and the company has approached a number of individuals to offer them voluntary severance packages.”

Mxit chief executive officer (CEO) Francois Swart said, however, the company was “stable” in spite of these redundancies.

“After a long period of development primarily focused on our messaging capability, our mobile social network is now in a stable condition and accessible on more than 8,000 mobile devices,” Swart said.

Following a “review of strategic opportunities” during this year, Mxit said it believed it should place a bigger emphasis on its social services and finding new ways to expand the footprint of these with a number of technology and media partners in the future.

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Passionate about the vibrant tech startups scene in Africa, Tom can usually be found sniffing out the continent's most exciting new companies and entrepreneurs, funding rounds and any other developments within the growing ecosystem.

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