About 135 staff members of Andela have suddenly been laid off across five countries, including Nigeria.
What we know: We understand that the layoffs also affected some of the company’s employees in the United States of America, Egypt, Kenya, and Uganda. There were no layoffs in Ghana and Rwanda, although the possibility of this happening in the near future abounds.
While responding to media enquiries by Nairametrics, a spokesperson for the company confirmed the development. However, an emailed response by the spokesperson explained that no Andela software engineer was affected by the headcount reduction exercise. Only employees in other departments were affected.
Reason for this decision: Andela was forced to take this course of action as a measure to navigate the negative economic impacts wrought by the Coronavirus pandemic. Part of the emailed response to our enquiries said:
“Similar to so many other technology companies around the world, we are not immune to the challenges of COVID-19, and the current global economic market requires us to conserve resources. To navigate the current environment, we have taken some pretty significant measures, including implementing a 3-month staff hiring freeze, re-evaluating all consulting and software spend. Even with our best efforts, it was clear that we were going to have to reduce our headcount globally.”
The backstory: On Tuesday, May 5th, 2020, Andela’s Chief Executive Officer, Jeremy Johnson, announced the impending layoffs much to the dismay of those employees who were affected.
In an email sent by him, as seen by Nairametrics, Johnson made it clear that this was a very tough decision to make. However, it had to be made nonetheless, because the company’s survival post COVID-19 depends on it.
Apparently, both Andela’s top management and staff have known for a while that the layoffs were imminent. However, Johnson noted that the company had tried all along to salvage the situation until it became clear that the decision had to be made.
He also explained that the sole reason the decision was taken is because Andela’s revenue streams have been impacted negatively by the pandemic. According to him, slower growth has been projected for the meantime due to COVID-19. And with slower growth comes lower revenue. It is, therefore, in a bid to take care of this problem that the decision was made to reduce head counts across departments.
“Unfortunately, given how much growth is likely going to slow and the fact that we can’t predict how long this period will last, that wasn’t enough. As a result, we had to look at headcount reductions, and we did this in two ways: which roles require fewer positions as a result
of slower growth, and which roles have less direct impact on revenue.
“Ultimately, we made the gut-wrenching decision to part ways with 135 colleagues. While every team is impacted, the headcount reduction is not uniform across the company. Certain teams like Technology were impacted less because they represent strategic investments we are making for the future. Later this week, we will be sharing more information about how these changes will impact how we operate moving forward,” Johnson said.
Andela considered salary cuts: Johnson’s email went further to disclose that the company’s top management had earlier considered slashing salaries across board. However, that course or action was decided against because “we determined that the savings did not warrant the disruption to the lives of our entire employee base”.
That said, all of the company’s directors (who were not affected by the layoffs), have agreed to salary cuts ranging from 10% to 30%.
It should be recalled that this is not the first time Andela has laid off some of its staff in recent times. Back in September 2019, more than 400 junior Andela employees were sent home. Nairametrics reported that this was part of the company’s restructuring plan.