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Coronavirus: Andela, in search of a model, experiences run of bad luck

By Quentin Velluet
Posted on Friday, 22 May 2020 14:10, updated on Monday, 8 June 2020 13:48

COVID-19 is not the only thing creating problems for Andela © Andela/2020

The pandemic has increased uncertainty among the start-up’s leaders as to the strategy to adopt to meet the needs of its market.

The sole person heading Andela since July 2019 following the depart of president Christina Sass,  Jeremy Johnson seems to be announcing one piece of bad news after another.

In early May, the young American executive, CEO of the US start-up specialising in the training and placement of African software developers on behalf of global tech giants, announced that 10% of the company’s staff was being laid off, impacting 135 people in Nigeria, Uganda, Kenya, Egypt and the United States, across all professions (Rwanda and Ghana were spared). Senior staff have also taken salary cuts in solidarity with efforts to keep the company afloat.

Just as it has impacted many other companies, the coronavirus pandemic has struck Andela’s markets, resulting in lower demand and a smaller customer base. However, COVID-19 isn’t the only stumbling block for the start-up which has raised $181m since its founding in 2014 and reported revenue of $50m at the end of 2019.

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In a statement on 7 May, Johnson announced that, in addition to staff reductions, Andela is opening up its pipeline of engineers to part-time contractors: “moving forward, we will expand the network to include top engineers from across the continent, and eventually around the world – and we won’t require engineers to be full-time employees to apply for opportunities.”

Since the departure of Andela’s Co-Founder and President Christina Sass, the entrepreneur – who is at his second start-up specialising in training – has constantly been rethinking what Andela’s strategy should look like.

Series of layoffs

Initially centred on training junior developers, Andela began shifting its business focus towards senior developers in September 2019. Back then, Johnson was still the bad guy who had to announce the laying off of 420 junior developers trained by the start-up.

Unable to quickly place them at customers like GitHub, Microsoft, IBM and Safaricom, the Princeton-educated executive decided to focus his efforts – outside of Rwanda – on training intermediate and senior developers to better align with market demand.

At the start of 2020, the company experienced a new spat of layoffs. The number of developers who got the pink slip is still unknown but according to the specialist website WeeTracker, intermediate developers may have been the target of staff cuts this time around.

What has been primarily presented as a misreading of the market can also been interpreted “in light of investor expectations, as investors are meant to spur the company to be more profitable and faster,” commented an investor who asked to remain anonymous. “Training junior developers involves more time and thus costs more money, especially if the developers go for a long time without being placed.”

Two executives have jumped ship

A few senior-level staff members have defected in recent weeks. As of 15 May and after four years of faithful service, Seni Suleyman, Andela’s Vice President of Global Operations, jumped ship to “tak[e] a personal sabbatical to rest, reflect, read, write, and re-energi[s]e.”

Omowale David-Ashiru, who had been working as the firm’s Nigeria Country Director, has been tapped to take over his position.

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Clément Uwajeneza, Andela’s Country Director for Rwanda since 2018 and an active figure in East Africa’s media industry, also left the start-up in April to become Chief Technology Officer at BeneFactors Ltd., a Rwandan start-up specialising in financial services for businesses. He will be replaced by Mike B. Ndimurukundo who up until recently served as the firm’s Senior Manager of the Developer Community in Rwanda.