Hundreds of jobs are being axed at Nollywood content providers, iROKO Partners quietly as the firm aims to move into profitability, cut down its operational costs and shift base to London according to sources familiar with the situation.

The sources, who asked to remain anonymous, claim iROKO is facing a very high degree of mismanagement and experimentation which is turning to be cruel to employees and hurting the name of the firm and its investors. The informants also accuse co-founder and CEO, Jason Njoku of ‘indecisiveness, mismanagement,cruelty and riding the Nollywood fame’.

“The place is abusive and investors are too negligent to the firm’s internal HR matters and over 100 people have been quietly let go in a few weeks even as Jason promises everyone a glorious future,” one of the sources told TechMoran. “In July, hired 100 people to do telesales. The firm expected them to sell free trials via phone miraculously. 50 new laptops and phones were bought and the office redesigned to fit them.”

The insider told TechMoran the move simply didn’t work, the telesales guys were devastated because they couldn’t do any magic. Shortly 96 plus people were fired from the firm consisting mostly of the telesales team. The firm then hired 10-15 content operations guys in London to reopen the London office, one year after it was shut down. These video editors, graphics designers among others are way more expensive than their counterparts in Nigeria.

With this experiments, the insider says iROKOtv was firing in Lagos to hire in London expecting to sign up a new market for Nollywood but adds that London is expensive and makes no sense but just a sign of ROKO has fired its VP of distribution, lead of partnerships, lead of offline, lead of YouTube, its CTO and the its engineering lead plus the telesales team and content operations,” says our second insider adding that though the lay offs could be iROKO’s plan to cut its burn rate, no one talks about the 5,000 DVDs dumped at the Johannesburg office, the low revenues and poor management or planning at the firm.

“iROKO is a circle, they repeat their mistakes every time. Shut down London office because Lagos is closer to the customers then re-open London office and hire an all-white team who cost quite a lot with hope they will turnaround the company and then burn more money again,” added the source.

iROKO had an engineering team in the states, a distribution and Linear TV team in the UK. Our sources indicate it shut free trial last year for telesales which was a bad idea and shut it down in a month and fired the team. It launched offline operations and spend money on it then disbanded the team.

Then came the firm’s mobile-app only strategy which didn’t last as Vodafone Ghana threatened it with a lawsuit. The deal with telcos was they can help distribute IROKO and in return increase their data usage but iROKO decided on its own it was going mobile and downloads only without proper communication.

According to another source, whilst download was great for Africa, the West didn’t like it and that was the only market downloading the app. In Africa, those who watch iROKO watch during the day during office hours on free internet and can’t download as most users don’t have office WiFi to download 100MB to 300MB in movies.

Many others didn’t want to store any of their downloaded movies especially when a move had part 1-4. To help increase this, the firm introduced assisted downloads and prices significantly reduced but still growth was slow. All these problems and experiments are blamed on mismanagement.

Like at one time, the firm bought movies before even signing on board linear channels. The lead Linear TV was just told to make it work and when it didn’t work she was fired.

“It’s basically a jungle run by an egoistic child,” claims another source also asking for anonymity. “They pull in talent but are unable to manage them in a humane manner. It’s an extremely hostile environment. Their ties to Nollywood are not unbreakable.”

The source adds that even raising more money won’t help save iROKO, and it would our fifth source claims it might even be hard to raise any money unless it’s from the same investors trying to protect their investments.

“More money with no direction saves no one. The head is infected, the body can’t function. They would have to ‘re-evaluate their strategy and key market. There are many loopholes from the massive madness, it is clear, a change is needed,” our fifth source said. “ has very very little growth and people in the Lagos market have too many alternatives, hence focusing on Lagos in the short-term has been pursued with a poor strategy.”

The sources claim there’s gross mistreatment of staff members, it would be difficult to even have talent implement changes when there is no room for alternative opinion at the top. They add that though Jason is brilliant and an exceptional salesman and will sell a dream and even the most realistic and logical of people will fall for it as they always have, and continue to; iROKOtv still might not have a turnaround because there’s no regard for employees, new hires are given a week, sometimes a month and a maximum of 3 months to create magic or move.

It’s new YouTube strategy is fantastic even though the firm has had a lot of issues with mobile partnerships. The firm is said to have a huge HR problem. Hiring and firing at short notice exploiting Nigeria’s weak labour laws.“With $27m in equity investments, iROKOtv’s main asset is content but the content library is worth $3.5m and subscription to is approx 50,000 users globally. So the question is where is the rest of the money,” asks one of our sources arguing that this might be the reason iROKOtv is firing out of panic even though the investors and board seem negligent and don’t hold management accountable or they just care less about their reputation and don’t want to intervene.

The source argues that iROKO is hated among the movie cycles and has allegedly run out of money and minus intervention, “poo is going to hit the fan”.

“iROKO is looking for credibility before it goes to market so re-opening the expensive London office and hiring new talent in London vouches for it,” says the eighth source. “iROKO might not run past December unless it raises another round or IPOs. Bastian wants financial efficiency, Jason doesn’t know what he wants. The tech team went up in flames and the company is literally divided into two and only a hostile take over can save it.”

After a little disagreement on the need for intervention, the sources agree that Iroko as a concept is great but needs better industry relationships and the idea is potentially very lucrative but needs to take off faster before competitors like Trace, an MTG firm backed by Kinnevik is rapidly expanding across Africa.

“They don’t like to pay locals what they’re worth and they overpay the new London team. iROKO is a success story because Jason makes noise. Goes on BBC, his blog and journalists don’t ask hard questions during interviews. He’s always promoting himself but with subscription less than 50K globally and declining there’s much to worry about,” claimed a former senior employee. “Jason is a great sales guy, so brilliant but sells his dream and then when you buy it, he demoralizes you and fires you. It’s terrible, people crying and feeling low. It’s the greatest mind Bleep of it all.”

However, not everyone is negative and pessimistic about iROKO.

“iROKOtv is a startup with its teething problems. The owners of iROKOtv are just MBA holders with ideas. With experienced hires, they will be out of the woods. I work for iROKOtv and I share the vision of its founders. It’s a great brand with good prospects.

Whatever challenges within the management is a navigation problem which every business faces in its formative years.” the person told us asking for anonymity.

The source added, there are quite a lot of positives about iROKOtv. iROKOtv has given Nigerian and Ghanaian local contents an international audience. The growth in those industries is not associated with the international advertising and recognition drawn by iROKOtv.

The source added that Africa is still struggling with broadband internet penetration. It’s a challenge for every internet based product and services. That affects the service delivery. On layoffs the source says that was business decision adding that some segments of the business expected to drive growth have been cost centres for a long time adding that there are a few fundamental investments in the brand that might have been neglected but by and large the business needs to hibernate a bit and re-strategize.

“HR will be HR and Business Management will be what it is. Profitability is key and that’s what the management is trying to focus on. There might be a lack of HR process in recruitment and retrenchments but vital lessons are being learnt,” says our source. “Some professionalism is being imbibed especially at the management level. iROKOtv will be fine. Jason can drive this brand to the top. He will learn from his mistakes like most CEOs.”

Speaking to TechMoran, Jason denies all this allegations terming them ludicrous. He says he’s best friends with his co-founder and they have been there for each other through various family situations.

“We have been friends for 13 years and the notion that our relationship is ‘deteriorating’ is ludicrous. When we communicate it’s always very honest, very emotional and very direct. But we are 1,000% en-sync,” Jason said insisting that unless someone left iROKO for gross misconduct, the firm has never (ever) not honoured someone’s contract of employment or ‘severance’ agreement.

“In most cases, if we had to say goodbye because of a change of business direction I usually overpay them. And always we appreciate their contributions. iROKO is one big experiment. That’s the very notion of a startup. Sometimes those experiments don’t work out. But that’s not abnormal,” he added pointing to the recent layoffs by Snapchat, Twitter and others which adjusted teams to reflect new realities.

“iROKO is no different. We grow teams, on occasions we have to say goodbye. iROKO is a really tough place to work. I have mentioned it many times before but winning sometimes requires that,” said Jason.

Jason says himself and his co-founder/ best friend Bastian have the board’s full support and if they didn’t, they would be the first to know.

“Considering Tiger Global ($18b) and Kinnevik ($9b) are arguably the most aggressive and successful emerging market investors. Powerless I think not,” he concludes.

  • TechMoran Magazine

    When times are tough….!