Andela, a prominent software development outsourcing company, announced on Tuesday to cut off over 300 junior software developers and staff in 3 African countries, for example, Uganda, Kenya, and Nigeria.
The layoffs come as the start-up released first-time earnings figures indicating it will surpass $50 million in annual revenues for 2019. Andela is now seeking to restructure and work with more experienced developers to catch up with global market demand.
The company trains and outsources developers to tech companies. For instance, Facebook, and Google and others which pays the company and the company pays the developer.
In addition the news seems a bit disassembled. Not everything moves in the same direction in the business of start-ups.
“We’ve seen shifts in the market and what our customers are looking for…toward more experienced engineers,” Jeremy Johnson Co-founder and CEO, said on a call.
Jeremy believes that as the talent world has evolved, Andela as well, and over the past few years it’s become increasingly clear that the world needs what they provide: high-quality engineering-as-a-service.
He added that “It has also become clear, however, that the majority of the demand is for more experienced talent, and to keep up with it, we need to grow our senior talent base even faster.”
According to techcrunch.com, by pre-layoff numbers, Andela had 1575 engineers on board. Big job cuts usually point to financial distress and decreasing demand for a company’s goods or services. That’s not the case with Andela’s personnel move, according to Johnson, who describes the layoffs more as a result of misreading the market.
The release of 400 developers may be welcome in Africa’s most active tech hubs. For example, Nigeria and Kenya, where rapid start-up formation and funding is starting to outpace software engineering talent — according to a number of founders.
Therefore Job-placement will partially depend on whether local tech companies can offer competitive packages to incentivize the Andela alums.
In other words, If they do, the net effect of Andela’s layoffs could be more software-engineering capacity for Africa’s tech ecosystem. So long as most of the developers remain in Africa.
In conclusion, Founded in 2014, Andela has offices in New York and five African countries: Nigeria, Kenya, Rwanda, Uganda, and Egypt.