Amid news that mobile social network was laying off nearly a third of its staff, Mxit has revealed that it plans to double its user base in the next year.
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Late last week employees from the mobile social network revealed that they had been offered retrenchment packages in what was apparently a cost-cutting exercise by the company. The company today confirmed that some 41 of its staff members had accepted voluntary retrenchments.
Mxit’s acting-CEO, Francois Swart says however that the cut-backs were part of an attempt to focus on growing the social network’s user base:
We have just completed a thorough and intense strategic planning process, in which the whole business was involved at some level in the process. Our goal is to more than double our user base during the next year. To achieve this we need to take a very focused approach to what Mxit does and does not do. Regrettably that means stopping or cutting back activities in some areas.
“Rapid growth is expected by investing in user acquisition, improving the user experience, empowering our developer community through richer APIs, and further promoting the excellent results our advertising partners have been achieving over the last two years,” he added.
That R100-million investment came just prior to the departure of Alan-Knott Craig Junior, who bought out 90% of the company in 2011. Knott-Craig hired aggressively, bringing in talent like head of developer relations Andy Volk from the US and leading the purchase of mobile social network builder Motribe. The latter move was seen by many as being more about bringing in the talent of strategist and developer Vincent Maher — now vice president of products at Mxit.
Despite the layoffs, Swart still seems bullish about the company’s future and (like his predecessor) believes that most of the growth will come from Africa:
“The ability to bring people into the social and information age, regardless of location, income or device, is a powerful opportunity. We are already bigger than Facebook on the mobile phone in South Africa and I have no doubt that we will see similar success throughout Africa. We have committed shareholders and arguably one of the strongest teams on the continent,” he said.
That makes sense in the short-term. Africa is still packed with feature phone users. Mxit’s J2me platform is perfect for such devices. The launch of apps that bring Instagram-style filters and Google Maps to the social network will only help its popularity on these types of phones too.
At the same time though, it desperately needs to work on its smartphone strategy. It is seeing assaults on its platform from the likes of iOS’ iMessage and Whatsapp. Add in Facebook and Twitter and you can see how tough the competition Mxit’s facing is. Knott-Craig knew this and wanted to drag the company into the age of the smartphone.
Whether his successors are aware of it too remains to be seen.
