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Insight & Analysis - November 28, 2022

Mass Layoffs in Africa: 5 Tech Companies Involved in 2022

The tech industry in Africa has experienced its share of layoffs in 2022, as some companies have mass terminated staff. According to data, this represents the highest layoff in the tech industry’s history, as over 119,000 employees from around 861 tech companies lost their jobs.

Apart from scandals and acquisition reasons, the layoff varied from one company to the other. Although most of the reasons can be linked to the decline in macroeconomics due to inflation and the unpredictable state of the foreign exchange volatility, some resulted from cost-cutting, bad performance and financial difficulties.

Here are some tech companies that lay off some of their staff in Africa.

54gene

54gene, a genomics research, services and development company in August, laid off over 30% (95) of its workforce. This was mostly contract staff in the labs and sales departments hired to work in 54gene’s COVID-19 business line launched in 2020. The affected staff were recruited via LinkedIn, an American business and employment-oriented online service that operates via websites and mobile apps.

According to the company, the decline in tests makes the COVID-19 operation arm of the company redundant hence the need for the layoff. The company’s spokesperson said, “Like so many others navigating this current market situation, we are not immune to adjusting headcount and our financials to remain competitive within the market.”

Quidax

Nigeria’s crypto company, Quidax, has joined the list of tech startups that laid off staff in 2022. The tech company laid off 20% of its staff three months after cutting its employees’ salaries by 30% and team leads’ by 50%.

According to the company, the lay-off was due to the unfavourable business environment of the country and not the bankrupt crypto exchange FTX. From the statement released by the company, affected staff will be given a severance package and support in their transition.

In appreciation of the lay-off staff, it says, “We’ve been privileged to work with people who light up any room with their personalities, brilliance, and hard work. If the tides turn, we would be eager to rehire these people. We can boast that they are more than capable of doing a great job anywhere.”

To this, Buchi Okoro, the chief executive officer (CEO), “This is a difficult time for Quidax and our internal organisation. My utmost priority is to boost team morale and keep business operations running as smoothly as possible. I’m convinced Quidax will come out on the other side better and stronger.”

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Twitter

Twitter, an American social media company, experienced mass lay off in the history of employment termination. The company laid off about 50% of its staff. This followed the company’s $44 billion acquisition by Elon Musk, the wealthiest man in the world. 

Although most of the staff were affected, Musk said the process was needed as the company lost over $ 4 million daily. Hence, it cut across different departments and countries, including the newly founded African branch.

Twitter laid off about 80% of its staff in Ghana, home to its Africa headquarters. This was evident from the farewell message Bernard Kafiu Sokpe, a Senior Partnership Officer at the Twitter Africa office, made on his Twitter handle. To reduce the impact of the mass layoff, Musk said the affected staff would be offered three months of severance.

Kuda

Nigerian digital bank Kuda laid off 23 of its staff which represents 5% of its 450 workers. In the statement released by the company, “Kuda is currently making some strategic changes to serve its customers better and continue to make financial services more accessible, affordable and rewarding to every African.”

This decision was made a year after the company, which provides zero to minimal fees on cards, account maintenance and transfers, raised $55 million. With the move, the company plans to launch its banking service in Uk, Ghana and Uganda.

Wave

Wave, an African fintech company with services in Senegal and Ivory Coast, laid off roughly 15% of its about 2000 staff in June 2022. The 300 affected employees mostly worked in Wave’s new markets: Burkina Faso, Mali and Uganda.

According to the company’s message to its employees, it was reducing its teams in the three markets as part of measures to ensure that it wouldn’t need to rely on investment all the time.

The company’s spokesperson said, “The people we’re parting ways with are some of the smartest and most dedicated in our industry. Letting them go is one of the hardest decisions we’ve ever had to make as a business. 

We regret the impact on employees and their families, but the best way to honour these colleagues is to ensure their contributions last. Wave offers enhanced benefits and packages to all affected employees to express our deep appreciation for their valuable contributions, hard work, and dedication.”

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