African based software development outsourcing company, Andela, is laying off 135 employees across four of its operating countries.
This announcement was made by Jeremy Johnson, the company’s CEO yesterday in a company-wide video conference call with all staff in Nigeria, Kenya, Ghana, Uganda, Rwanda, Egypt and the United States. The company says that these layoffs will not affect employees in Ghana and Rwanda.
According to Jeremy, the layoff was due to impact of the COVID-19 on the company’s customers and the accompanying economic downturn. Based on this, the company was implementing cost-cutting measures to ensure the company can cope with the decline in business from existing customers and new customers. The company expects to save about $5million from the layoffs.
Other cost cutting measures include the following:
- All directors and above will also experience 10% to 30% pay cuts depending on seniority.
- Cuts in operational costs from travel, compensations, softwares and others… to save about $25 million
The company-wide layoffs will take effect as from May 8 except Kenya and Egypt and it will affect roughly 10% of the company staff. However the affected employees will receive severance packages and fours months of health coverage.
This is the second major downsizing exercise by Andela within the last 9 months. The last exercise happened in September 2019 where the company let go of over 400 junior employees as part of “restructuring its talent pipeline to meet global market demand” despite confirming that it would make $50 million in revenue at the end of 2019.
With the present layoffs and cuts, it points to the fact that revenues would be adversely impacted this year.
Founded in 2014, Andela has secured $180 million in funding to date with the completion of a $100 million series D funding to accelerate expansion in 2019. It secured $40 million in 2017 and another $24 million in 2016 from the Chan Zuckerberg Initiative.
Subscribe to Innovation Village to get latest business technology news, reviews and more everyday.
