South African fintech startup Yoco is conducting an “impactful” number of retrenchments in a bid to remain sustainable going forward throughout the COVID-19 pandemic.
Yoco said thousands of its clients are experiencing revenue losses of over 90 per cent, and this impacts the startup too – necessitating “urgent” action.
While the management team has taken salary cuts, the startup has also decided to make substantial retrenchments; prioritising keeping the technical, maker, and product team untouched.
Lungisa Matshoba, co-founder and chief technology officer (CTO) of Yoco said bearing in mind that many companies leave it too late to take the decision to resize their team, Yoco’s management are of the view now is the right time to be “prudent” and make clear-cut retrenchment decisions.
“As a business we looked at what’s going on in the climate of today – and we try and take a very responsible stance to how we approach things as a company – and our view was that many businesses leave it too late in this type of situation to look at something like retrenchments. This means that by the time they do it, they actually have no options left in terms of how they do it,” Matshoba told Disrupt Africa.
“Our view was that if we can start looking at this at the right time – as we feel that now is the right time – we can do it while we have a tonne of options around how we do it in a graceful manner, that upholds our principles as a company,” he said, adding the startup is taking a “structured and generous approach” to the retrenchments.
Matshoba said in making the cuts to the team, the startup looked across the business to see how to “create flexibility” while maintaining key talent much needed over the coming period.
“When we look at our focus over the next while, our technical and maker talent is where we see the most value in the business coming from during this time, so we’ve made sure that from that perspective we’re stable,” he said.
With Yoco’s customers going through a really tough time, Matshoba said the startup has to ensure its energy is focused on supporting them.
“The way to do that is to do this once, and in a very clear fashion, which then makes sure the business is strongly sustainable going into the future,” he said.
The CTO said the process has been “extremely tough”, and the startup has had to part ways with some of its most talented people, but hopes to be able to re-employ some team members further down the line.
“It’s been extremely tough. Our team is a very close-knit team, with really good and mission aligned people. And when we were chatting to the team, we realised that this is the best team we’ve ever had as a company, so that’s a tough thing to have to do – to look at resizing what is effectively the best team you’ve ever had, because you’re losing good people. Here you’re having to let go of some of your most talented people,” he said.
“Our ultimate goal as a business is to hopefully be in a situation where we can bring some of those people back into the company over the next while.”