Andela is letting go of 400 junior engineers despite confirming that it will make $50 million in revenue at the end of the year. This is as reported by Techcrunch in a discussion with CEO, Jeremy Johnson.
This sends conflicting signals as it would have been expected that the company would be increasing its staff strength instead of retrenching 400 people across the Nigeria, Kenya and Uganda offices.
According to Jeremy on the staff cuts, “they are due to market demand for more senior engineering talent.”
“We’ve seen shifts in the market and what our customers are looking for…toward more experienced engineers,” Johnson added.
This retrenchment may also be due to the fact that the company is trying to reduce its expenses even in the light of expected revenue. However one must state this is the first time the privately held company is releasing revenue figures. And Johnson confirmed that the company is not yet profitable.
Johnson said that the layoffs were more as a result of misreading the market. “We’re actually actively and intensely growing, the mid and senior developer populations and next year we’re going to bring in 500 more developers,” he said.
“We’ve hired more junior developers than we are able to place in remote roles.”
Andela has been highlighted as one of the breakthrough companies in Africa as it is modelled after the famous outsourcing of Indian customer services teams to the western world.
Over the last couple of years, the African based software development outsourcing company has attracted funding from notable organisations and personalities. It recently completed a $100 million series D funding to accelerate expansion, bringing Andela’s total venture funding to $180million. It secured $40 million in 2017 and another $24 million in 2016 from the Chan Zuckerberg Initiative.
Andela says its client-base is over 200 companies around the world that pay for the African developers Andela selects and trains to work on projects. Before the layoffs, Andela had 1575 engineers on board.
Johnson says that the retrenched staff will get good severance packages and placement assistance. He also said that “many of these people will rapidly get jobs in the local ecosystem and some day may come back and work at Andela again.”
