Africa-focused tech talent accelerator Andela recently released its first time earnings figures indicating that it will surpass $50 million in annual revenues for 2019. However, this news came with the unexpected layoff of about 400 junior Andela developers and engineers across Nigeria, Kenya and Uganda.

 

The software developer training and outsourcing company first Launched in Lagos five years ago, in 2014. Then, its business model was simple. It aimed to train entry-level developers to be globally competitive and then place them on four-year contracts. That way, Andela would earn revenue by outsourcing their skills to clients, mainly in the United States, in that time frame. It did this through the Andela Learning Community (ALC) programme.

 

In a company release, the company said the staff cuts were “due to market demand for more senior engineering talent”. The CEO, James Johnson, said on a call with Techcrunch, “We’ve seen shifts in the market and what our customers are looking for…toward more experienced engineers.”

 

 

Andela’s client base extends to over 200 companies around the world. These companies pay for the African developers that the startup selects and trains to work on projects.

 

Andela currently has offices in New York and five African countries: Nigeria, Egypt, Kenya, Rwanda, Uganda and Egypt. The Series D tech-venture is one of Africa’s most visible (by press volume) and best funded startup. It received a backing of $181 million in VC from investors that include the Chan Zuckerberg initiative.

 

By pre-layoff numbers, Andela had 1575 engineers on board. Big job cuts usually point to financial distress and decreasing demand for a company’s goods or services. That’s not the case with Andela’s personnel move, according to Johnson. He describes the layoffs more as a result of misreading the market.

 

In the future, Andela also says that they will hire an additional 700 experienced engineers by the end of 2020. Meanwhile, the company has made some moves this year. They raised $100 million series D round on January and they also appointed a former BRCK executive as Kenya’s Country Director quite recently.

 

 

“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,” the Andela CEO said. “We’ve hired more junior developers than we are able to place in remote roles.”

 

The departing Andela software-engineers will gain severance packages and placement assistance, according to Johnson. The company is working with partners such as CcHub and iHub to connect the developers to new opportunities.

 

“Many of these people will rapidly get jobs in the local ecosystem and some day may come back and work at Andela again,” he said.

 

The release of 400 developers may be welcome in Africa’s most active tech hubs, such as Nigeria and Kenya. There, rapid startup formation and funding is starting to outpace software engineering talent — according to a number of founders.