Could Andela lay-offs actually be good news for Africa’s startup ecosystem?


It hit the African tech space like a tsunami earlier this week – coding accelerator Andela was laying off 250 junior developers in Nigeria and Uganda, and perhaps another 170 in Kenya.

One of Africa’s flagship tech companies, a fundraising machine that took in a US$100 million Series D round as recently as February, and a potential unicorn, Andela builds distributed engineering teams with African software developers to solve global talent shortages.

The much-touted mission was to take young Africans, who need not necessarily have coded before, and turn them into developers for Fortune 500 companies, solving unemployment issues in the process. 

An aggressive pivot

Yet in what it is calling a “restructuring” of its “talent pipeline”, Andela is laying off as many as 420 junior developers, and planning to replace them with 700 senior ones. This, the company says, is to meet market demand. Its customers, it says, want senior developers, so it is hiring more of them, and cutting loose junior engineers it no longer needs.

This is a body blow to Andela’s reputation. One of the reasons the pivot has gone down so badly is that the company seems to be backtracking on its entire ideology. Its mission was to grow African talent from the ground up, but now it is basically shedding its own trainees and saying it will hire the senior talent the market has already trained

Most importantly, however, it is devastating for the hundreds of young developers with hopes of a bright future at Andela that have been chucked to the curb as the company conducts an aggressive pivot. For these developers, it is heartbreaking. They have lost well-paid jobs at a growing multinational, a potential future unicorn, and their immediate earning potential has declined.

Yet could it be good news for local startup ecosystems. Andela is talking a good game about its priorities being to rehouse these former staff members, and the company has partnered with Nigeria’s Co-Creation Hub (CcHub), Kenya’s iHub and Uganda’s Innovation Village in order to help connect impacted staff with opportunities within their local ecosystems. These local ecosystems will welcome them with open arms. They are getting their developers back.

Welcoming junior developers home

Andela as a revenue-making service was not made for Africa.The company has been very clear its target market is global Fortune 500 companies, it has relatively few African clients, and most African tech startups cannot afford it.

In fact, it was more of a hindrance. Many entrepreneurs, especially in Nigeria, have bemoaned losing developers they have spent time and money training to better paid gigs at Andela over the last few years, with the company only really serving to add to the “brain drain” felt in the startup ecosystem when it came to software developers.

Now though, those developers have been released back into the wild, in theory better trained and with experience of working on all types of projects for major global clients. The local startup scenes in Nigeria, Uganda and Kenya are suddenly awash with talent.

Unsurprisingly, startups and bigger companies within these ecosystems are showing an interest, while the hubs mentioned above will play a critical role in connecting newly-unemployed developers with new projects. The reaction has been biggest in Nigeria, Andela’s “home” market, where fintech company Flutterwave will tomorrow (September 21) hold a jobs fair to try to help developers return to employment quickly. Startups such as Cowrywise, Farmcrowdy, Kobo360, Allpro and Thrive Agric have offered their support and are among the companies that will be at the fair.

A bright future

Initiatives like this will be replicated elsewhere, as startups in these ecosystems take advantage of a tech talent pool that has suddenly swollen in size. The lay-offs will have come as a surprise to the affected developers, but their futures remain bright as local ecosystems prepare a soft landing for them. They will quickly fill pivotal positions at startups across the continent, and many will launch startups of their own.

So for all the debate about whether or not Andela counts as an “African tech startup”, its pivot could end up being a major contributor to the sector’s growth regardless.

There are still some potential downsides, however. Having dealt with losing junior developers to Andela for the last few years, fears will be raised that the startup space could now be facing more losses, this time in more senior roles. Time will tell if this is the case. But at least it has its junior developers back.


About Author

Passionate about the vibrant tech startups scene in Africa, Tom can usually be found sniffing out the continent's most exciting new companies and entrepreneurs, funding rounds and any other developments within the growing ecosystem.

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