Andela layoffs mark shift in youth talent policy

Tech firm Andela’s recruitment and training of junior software developers marked an ambitious bet on African youth, but in September the company announced it would let hundreds of them go. Linus Unah reports.

In January, tech firm Andela, which trains African software developers before hiring them out to companies, raised $100m in a Series D funding round led by Al Gore’s Generation Investment Management. High-profile Silicon Valley backers, including the Chan Zuckerberg Initiative, GV (Google Ventures), Spark Capital, and Africa’s CRE Venture Capital also threw their weight behind the round.

Soon after, co-founder and CEO Jeremy Johnson expressed his ambition to boost tenfold the number of the firm’s African developers.

“We’re at roughly 1,100 developers now, we’re going to double that over the next year and over the next five to 10 years we expect it to be 10,000. And so we’ve got a lot of work to do,” he told African Business in February. But on September 17, the New York-headquartered firm announced that it would lay off hundreds of junior engineers in Nigeria, Uganda and Kenya, where it will be ending its training programmes. About 250 junior developers will be let go in Nigeria and Uganda, and some 170 could be affected in Kenya.

Andela will continue to run its junior-developer training in partnership with the Rwandan government at its recently launched pan-African hub in Kigali.

The company blames a shift in demand for the decision, and said it would struggle to find “meaningful work” for the departing junior engineers over the next year.

‘Strategic shift’

“It’s also become clear, however, that the majority of the demand is for more experienced talent. As a result of that, we began sourcing and assessing mid-level and senior engineers, and they now represent more than 25% of our talent base. While placing teams led by senior engineers has helped drive additional junior placement, it hasn’t been enough. We now have significantly more junior talent than we are able to place… As a result, we’ve come to the conclusion that Andela’s next phase of growth requires a strategic shift in how we think about talent,” wrote Johnson in a blog on the Andela website in September. 

The software engineers that Andela has recruited and trained since it was founded in 2014 are outsourced to international companies, mostly in North America and Europe. Every year, tens of thousands of budding engineers apply for its highly sought-after fellowship, but only a fraction are selected for training at Andela’s campuses in Nigeria, Kenya, and Uganda. The company said it has hired less than 1% of more than 130,000 applicants over the last four years.

Under a four-year contract, the engineers are absorbed into the team and go on to offer their skills to more than 200 international clients, which have included Viacom, Cloudflare, GitHub and Invision. Yet the unexpected news of the layoffs so soon after the funding round raises questions over the firm’s ambitious bet on African youth.

“The information came abruptly, no one knew until the day it was unveiled in a meeting convened by the CEO of the company,” one of the departing junior developers who joined Andela in April, told African Business. “Perhaps if they had informed us earlier, it would have given people time to make alternative plans which would have made it a smooth transition.”

The company said it now expects to hire another 700 senior engineers by 2020 to keep up with the demand for experienced talent from its clients.

“Moving forward, we’ll be shifting our approach to be focused on senior talent, with junior talent layered in on top of it. While nuanced, this shift in focus will allow us to better align with what the market needs, and in the process better connect brilliance with opportunity at all levels,” wrote Johnson. 

Johnson said that the company will continue to run the Andela Learning Community through which it provides free mentorship and training in the fundamentals of software engineering, and insists that it will “cultivate more than 100,000 engineers” over the next three years”.

The junior developers that were affected by the decision received severance packages, counselling, and a three-month free access to co-working spaces at innovation hubs such as CcHUB in Nigeria, iHub in Kenya, and Innovation Village in Uganda. The firm said it has worked with these hubs to identify about 60 companies looking to hire junior developers in local markets. But the decision will impact budding junior developers who have seen Andela as a sure-fire route to the top. Coding bootcamps, universities and in-company training are likely to prove better options going forward.

“This has nothing to do with cost cutting, or government policies – it’s a function of the market,” Johnson said in a Facebook post. “We haven’t been able to scale remote, junior placements, in part because bootcamps and CS programmes have grown rapidly over the past five years, and we’re no longer able to lead with a junior-first strategy.”

Leaner operation

Andela’s shift from that strategy was received with surprise so soon after the funding round. 

“The model is clearly not as promising as it is made to look,” argues Benjamin Dada, an African tech pundit. “We thought the company could hold out for as long as possible since they had venture capital-backing.”

Nevertheless, Andela’s shift could help to make it a leaner operation. According to Quartz it is on track to “nearly double” its revenue to $50m year on year, but hasn’t forecast profitability in that period. 

Local companies as well as international firms are rallying around to take in some of the junior engineers. Shakim Harris, founder of US-based Amen Tech, a technology solutions and analytics company, says the firm has hired an ex-Andela engineer. Harris believes the affordability of ex-Andela talent will not be a barrier to local startups.

“Local startups will more easily be able to afford them because the supply is now greater than what it used to be, hence, pricing will drop,” he says.

The junior developer interviewed by African Business has received offers in the immediate aftermath of the layoffs and now works with an international client remotely.

“I want to be a world-class software engineer and Andela promised and lived to the promise,” the junior developer admitted. “What I learned in Andela in six months will always make me outstanding wherever I go.”

Still a success

Despite the layoffs, some analysts say Andela still deserves credit for its effort in placing African talent on the global map.

“I think the success of Andela isn’t diminished by the layoffs any more than the success of General Motors and Ford is by their recent, very public, layoffs,” says Harris.

Concluding his blog post, Johnson wrote: “No story of growth is perfectly smooth, and these last few weeks have been amongst the hardest. Yet despite this, I’m confident that we’ll emerge stronger and more connected both to the market we serve and to the mission we are working to advance.”