Nigerian tech companies and employees are concerned about mass layoffs.
Many people in the IT industry have been singing the blues on Twitter, Facebook, and other social media platforms for weeks after being laid off in waves by companies like Stripe, Twitter, and Meta. And all signs point to further layoffs in the technology sector between now and the first quarter of 2023.
Already, American retail juggernaut Amazon has declared it, too, would be cutting off about 10,000 employees, and sources suggest the corporation has begun the process with a note to all of its workers preparing them for the tsunami.
In less than two weeks, three of the world’s largest IT giants laid off 15,820 employees, raising new fears for Nigeria’s tech sector.
These worries are well-founded since a growing number of IT corporations are secretly cutting down on staff.
814 IT companies have laid off 128 865 individuals this year. This month, Stripe slashed 1,120 jobs or 14% of its workforce.
Elon Musk recently bought Twitter, which fired 3,700 workers. Meta lay off 11,000 individuals, or 13% of its workforce, last week.
Salesforce, a cloud-based software company, also announced layoffs this week.
Those in the tech industry in Nigeria are particularly worried about these changes because of the effects they may have on their job prospects.
A common thread running across all three rounds of massive layoffs in the software industry is that firms grossly overhired during the last two years. In addition, the COVID-19 epidemic stoked the fires of the previous recruiting frenzy, leading to a boom in earnings for the technology sector. The tech titans claim that maintaining current staff levels is no longer possible and that drastic cost reductions are necessary for survival.
As with the rest of the world, Nigeria is experiencing layoffs in the IT sector. As a result of the country’s poor economic climate (high inflation, a fluctuating currency rate, etc.), many Nigerian businesses are struggling. Since things are not progressing as they should, the firm is not producing as much money as it used to, and they also need to please their investors, I know it may happen to me or any of my coworkers as well.
There is absolutely no way out. Layoffs are occurring in the Nigerian tech area, albeit not at a level where they could be classified as a tsunami, according to Oladiwura Oladepo, co-founder of Tech4Dev, a non-profit organisation fostering entrepreneurs via digital skills. Oladepo said that Nigerian tech businesses will be impacted by the same issues as the global tech giants and that there would be no way for Nigerian enterprises to avoid layoffs.
Everyone is feeling the effects of the ongoing global recession. In addition, it has an impact on every Nigerian business. Tech businesses in Nigeria would be hard hit by the current round of layoffs. If you stop and give it some thought, if the large global IT men are laying off at this enormous pace, then Nigerian firms are not much better. The inflation rate in Nigeria has risen from 11% to around 21.63%. That being the case, it’s inevitable that some employees will be let go at Nigeria’s IT firms. I am aware of a few companies in Nigeria that have been secretly laying off employees.
People don’t hear about it since it’s not a huge deal, and these groups aren’t as well-known as Flutterwave. They are laying off workers, and even those that aren’t have put a stop to hiring and are cutting down on new hires. However, the events in Nigeria are not large enough to be called a tsunami. It was Oladepo who stated
After successfully attracting investment capital, a large proportion of Nigerian businesses will begin to overstaff. The tide is turning, and we can feel it in our tech investments. All of these businesses felt the COVID tailwind in 2020 when they made significant digital investments in support of the at-home economy. From the perspective of the consumer, this has resulted in an excess of technological resources and a surplus of technical personnel at the major technology firms. Every tech company’s CEO and CFO drew a straight line at 25%–40% revenue growth when planning their budgets and forecasts. Every tech firm needs to make some changes now that revenue growth has slowed dramatically or contracted.
Parekh made comments implying that layoffs would increase because other tech firms would follow suit and reduce headcounts.
During the epidemic, tech firms doubled their workforce through a massive hiring push. Still, they will need to make changes in light of the forthcoming recession and the trend toward higher inflation. There’s a chance that layoffs will continue, which is unfortunate. While things could settle down for the rest of the year, he warned that Q1 2023 could see more widespread layoffs in the technology sector as companies continued to adjust.
Writers sidenote: The Nigerian tech ecosystem has a thing for copying trends, so some oversabi founders with no staff on their payroll will also tweet that they have laid off staff.