In a move reflecting broader trends of corporate pullback amid Nigeria’s economic challenges, Microsoft is closing down its African Development Centre (ADC) in Nigeria, a pivotal engineering hub inaugurated with much fanfare as part of a $100 million investment in 2019.
Although the tech giant cited “organizational and workforce adjustments” as the reason for closure, the development signals a significant setback for Nigeria’s burgeoning tech landscape, which has increasingly relied on foreign investments to catalyse innovation and growth.
A reliable inside source at Microsoft Africa confirmed that the company’s employees at the African Development Centre in Nigeria will be affected by the closure.
“The employees at the Africa Development Centre in Nigeria will be impacted,” the source said during a phone conversation with Business Elites Africa on May 8.
Although specifics on the number of layoffs were not disclosed, a report from The Guardian estimates that up to 200 employees could lose their jobs. This development is poised to send ripples through the local economy, potentially stalling some of the recent advancements in tech expertise and employment.
Microsoft’s Future in Nigeria
Despite the closure of the ADC, Microsoft’s other business operations in Nigeria will continue, our source confirmed. This selective scale-down illustrates a recalibration of the company’s involvement in Nigeria rather than a complete withdrawal.
Microsoft’s official statement did not disclose specifics but reiterated its commitment to investing strategically in Nigeria.
“Organizational and workforce adjustments are a necessary and regular part of managing our business. We will continue to prioritize and invest in strategic growth areas for our future and in support of our customers and partners,” the company says in response to an email inquiry from Business Elites Africa.
The ADC’s closure aligns with a disturbing trend of international firms downsizing or completely exiting the Nigerian market due to economic instability. Notable companies such as GlaxoSmithKline, Procter & Gamble, Jumia Food, 54gene among others exited Nigeria in 2023, underscoring the challenging economic climate.
Interestingly, while the ADC in Nigeria winds down, Microsoft’s similar facility in Kenya remains fully operational and unaffected. This disparity highlights differing market dynamics and operational successes in the East African region compared to West Africa.
The ADC Impact
The Nigerian ADC was a cornerstone of Microsoft’s vision for harnessing and nurturing tech talent in Africa. Starting with over 120 engineers and swelling to more than 200 staff, the center was a beacon of innovation and skill development in Lagos, Nigeria’s commercial nerve center.
Its closure marks a poignant moment for Nigeria’s tech sector, which had viewed the ADC as a critical driver of technological advancement and international collaboration.
This strategic pullback by Microsoft, while pragmatic from a business standpoint, casts a shadow over the future trajectory of Nigeria’s tech ecosystem, raising questions about the sustainability of foreign investment and the stability of the tech industry in an unpredictable economic landscape.