African software engineering talent company, Andela, will layoff 135 of its workers across four countries due to an economic downturn resulting from the COVID-19 pandemic. The countries affected are Egypt, Nigeria, Kenya, and Uganda.
The number represents about one-tenth of its total staff strength. Andela’s CEO, Jeremy Johnson, announced the layoffs in a company-wide video conference call on 5th May 2020.
Over 1,300 staff from Nigeria, Uganda, Kenya, Rwanda, Ghana, Egypt, and the United States were in attendance during the call.
“While our customer base has held up better than most, the majority have still been impacted by the economic downturn,” Johnson said.
Andela says it expects 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,” Johnson had added.
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According to TechCabal, Andela says that about 50% of its partners are at risk, due to the economic downturn.
Further cost-cutting measures
This is the third time the company is laying off workers within the last 9 months.
In September 2019, Andela had laid off about 420 staff comprising mainly of junior developers. It also let an unspecified number of workers go between January and February 2020.
In addition to the layoffs, the company will also cut the pay of all directors and senior staff by between 10% to 30%, depending on seniority.
This is in addition to cutting down expenses on travel, compensations, software, and inventory to save the company about $25 million. The layoffs will save the company about $5 million in costs according to reports.
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