Despite revenues surpassing $50 million, Andela sacks 400 engineers in Kenya, Uganda, and Nigeria.

Andela's CEO, Jeremy Johnson, disclosed that the tech talent accelerator company will cut 400 junior engineers across Kenya,  Uganda, and Nigeria.

The staff cuts were said to be due to market demand for senior engineering talent.

The layoffs come as the startup released first-time earnings figures indicating it will surpass $50 million in annual revenues for 2019.

Andela has offices in New York and five African countries: Nigeria, Kenya,  Rwanda, Uganda, and Egypt. The startup is one of Africa’s best-funded ― backed by $181 million in VC from investors

Andela selects a roster of developers each year who come on staff for a salary and are encouraged to continue working and living in their home markets in Africa.

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, who describes the layoffs 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.”

The company is said to be working with partners such as CcHub and iHub to connect the sacked young 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, where rapid startup formation and funding is starting to outpace software engineering talent  — according to several founders.

Job-placement will partially depend on whether local tech companies can offer competitive packages to incentivize the Andela alums.

If they do, the net effect of Andela’s layoffs could be more software-engineering capacity for Africa’s tech ecosystem ― so long as most of the developers remain in Africa.

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