Why Andela had to lay off over 400 software developers in Uganda, Kenya and Nigeria

Andela has decided to lay off over 400 junior software developers in Uganda, Kenya and Nigeria as the company makes big changes from within –in a new strategic move. The technology outsourcing company first launched in Nigeria over five years ago, its business model was to–train local new-level developers to be able to compete on a global market. The company there after gives the developers four-year contracts and earn revenue by outsourcing these developers skills to their partners, mainly in the US who mainly those who are budget conscious and want great skill at a low cost.

Today, Andela is the most elite engineering organization in Africa, representing over 1500 engineers and working with more than 200 of the world’s most respected technology companies. 

The tech based company has now made some changes to its model of business and will immediate effect no longer train jr developer in Nigeria, Kenya and Uganda—three of its four African campuses. By extension, Andela is also letting go of over 250 of its contracted junior developers in Lagos and Uganda while up to 170 trainees in Kenya could also be “potentially impacted,” the company says.

Jackie Ochola, Andela Uganda Country Director says,

“Whilst we strongly believe that these changes will enable Andela to be a more successful business going forward, our first priority is to support all of the team members affected by today’s news, both directly and indirectly. We will be working closely with strategic partners in the Ugandan tech ecosystem to match amazing talent with current opportunities.”

The company however says that it will still maintain its junior developer training program in Rwanda. This was possible because unlike other countries, the Rwandan government subsidizes these training programs.

The problems for Andela began when research showed that the US is currently saturated with skilled junior developers who charge similar to the company. Seni Sulyman, Andela’s vice president for global operations said.

“Over the past five years, there has been a massive wave of boot camps and programming classes of different kinds like Lambda and Flatiron schools. Computer science schools in universities have also ramped up their programs. What that has done is create a massive flux of junior engineers in the US…which is our primary market,”

Andela to continue with senior developer engineers

Since the US already has an excess of junior developers this means “demand is heavily skewed towards more senior talent,” Sulyman says. The change in Andela’s business strategy will now see it focus more on hiring and then outsourcing senior engineers from its African markets. Infact, the company plans to hire an additional 700 experienced engineers by the end of 2020.

Andela announced a $100 million Series D round in January—one of the largest ever single rounds raised by an African-focused tech company.

Andela is currently no where near the red light, In 2016, US based global software development and products company ThoughtWorks, officially pulled the plug on their Uganda office. ThoughtWorks had over 30 offices in 13 countries which include; South Africa, India, Australia, USA, Germany, Turkey, United Kingdom, Brazil, Ecuador Singapore and Uganda which was closed.

In a blog post, Andela CEO and Co-Founder Jeremy Johnson said;

“No story of growth is perfectly smooth, and these last few weeks have been amongst the hardest. Yet despite this, I’m confident that we’ll emerge stronger and more connected both to the market we serve and to the mission we are working to advance. And I look forward to trying to hire back many of these extraordinary engineers down the road – if you don’t get there first.”