Andela is the latest company to be struck by the economic impact of the COVID-19. The Nigerian tech-outsourcing company announced yesterday that it has laid off 135 of its personnel across four locations on the continent.
Andela CEO, Jeremy Johnson announced the layoff in a video conference meeting with employees from Nigeria, Uganda, Kenya, Rwanda, Ghana, Egypt, and the United States.
According to Jeremy, while the company’s customer base has held up well during this period, the majority have still been infected by the COVID-19 induced recession. As such the company is anticipating a decline in new customers, hence the drastic decision made.
“While our customer base has held up better than most, the majority have still been impacted by the economic downturn. We expect to see churn spike this year as well as a decline in new customers due to the economic uncertainty. Expectations for slow growth necessitate cost-cutting measures to ensure that we make it to the other side.”
Jeremy Johnson, CEO, Andela.
This new layoff means that Andela will be cutting off about 10% of its staff strength, the third time it will be doing such within the last 9 months. And the company expects to save $5 million from the layoffs.
In September 2019, the talent hub laid off 400 of its junior developers because it could not find enough jobs that match the skill and experience of the talent pool over the next one year.
Earlier this year in February, the company silently rolled out a voluntary exit program for developer staff who had not yet been placed in the Eng 1 and Eng 2 category.
This is not so surprising. Following the coronavirus pandemic, many companies have been laying off and cutting down on costs with salary slashes.
Recently, IrokoTV cut the salaries of 49 employees and furloughed another 83 employees in Nigeria.
Nevertheless, the tech community has taken online to react to the layoff. Many are of the view that it is beyond just coronavirus effect and there are some underlying factors considering the frequency of the layoffs in the last year.
Some are of the view it is what it is, the coronavirus effect is one that is not peculiar to Andela alone.
On the other hand, many are of the view that it opens up opportunities for more seasoned tech talents at Andela to try their hands somewhere else.
Beyond the layoffs, directors and above will take pay cuts of up to 30%. The company will cut down on operational costs from travel, compensations, software and others to further save about $25 million.
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