Despite raising a $100 million in January and projecting revenues of $50 million-plus this year, African engineering recruiter Andela is laying off hundreds of junior engineers in a move to “restructure its talent pool”.
Andela, which trains and outsources African engineers and coders to work for global firms, has announced that 250 junior engineers and staff from its Nigeria and Uganda hubs have been laid off with another 170 potentially impacted in Kenya, according to the Andela blog.
The restructuring is expected to affect around 26 percent of the 1,575 engineers working for Andela.
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The Nigerian startup, which is based in New York City, said the decision to let go of the junior engineers is designed to align the company with global market demand.
The layoffs were surprising. Andela raised a $100 million Series-D round in January, bringing its total investment to date to $181 million, according to Crunchbase.
Perhaps even more surprising is the fact that these layoffs come as the startup released first-time earnings figures indicating it will surpass $50 million in annual revenues for 2019.
So far, Andela has trained mostly junior level developers, and the company says it has become increasingly evident that this was not fulfilling market needs. Customers required more senior staff.
“As the talent world has evolved, we have as well, and over the past few years, it’s become increasingly clear that the world needs what Andela provides: high-quality engineering-as-a-service,” said Jeremy Johnson, Andela co-founder and CEO, in a press statement emailed to Moguldom.
“It has also become clear, however, that the majority of the demand is for more experienced talent, and to keep up with it, we need to grow our senior talent base even faster.”
“This shift in demand also means that we now have more junior talent than we are able to place. This is a challenge for the business, and for these junior engineers who want, and deserve, authentic work experiences that we are not able to provide,” Johnson added.
With that change of approach in mind, Andela plans to hire an additional 700 experienced engineers by the end of 2020, according to the blog.
Since launching in 2014, the company has hired and developed more than 1,000 software engineers across the continent who collectively help power the technology teams of more than 150 global companies, including Mastercard, Microsoft, Google, IBM, Viacom, Pluralsight and GitHub.
Andela has promised to assist those affected by the layoffs to find opportunities in their local tech ecosystems.
