Microsoft Closes Nigeria Hub, Affects 100+ Amid Crisis

Key Takeaway

• Microsoft closes its Lagos, Nigeria engineering center due to economic challenges, leaving Nairobi as its sole Africa Development Center.
• Over 100 engineers affected by the closure amid Nigeria's currency crisis, dollar shortages, and high inflation impacting business operations.
• The shutdown signals broader issues for foreign investment and innovation in Nigeria's tech industry and economy.

Microsoft Closes Lagos Engineering Center

Microsoft Corp. has announced the closure of the engineering section of its Africa Development Center (ADC) in Lagos, Nigeria, two years after its inauguration. This move leaves the Nairobi, Kenya center as the sole ADC location on the continent. The decision by Microsoft adds to a growing list of multinational corporations, including Procter & Gamble Co., GSK Plc, and Bayer AG, that have scaled back or exited operations in Nigeria post-pandemic. The country has faced economic challenges such as a currency crisis, dollar shortages, and high inflation, impacting business growth and consumer purchasing power. A Microsoft spokesperson stated, “Organizational and workforce adjustments are a necessary and regular part of managing our business,” emphasizing the company's commitment to investing in strategic growth areas.

Economic Challenges in Nigeria

The closure of Microsoft's ADC in Lagos is attributed to the challenging economic conditions in Nigeria. The nation has struggled with a currency crisis, dollar shortages, and high inflation, which have hindered business growth and diminished consumer purchasing power. These conditions have led to a reevaluation of business operations by several multinational firms in Nigeria. The Guardian newspaper reported that over 100 engineers would be affected by the closure, highlighting the significant impact on job opportunities and the tech industry in Nigeria.

Impact on Local Economy and Tech Sector

The shutdown of Microsoft's ADC in Lagos is expected to have profound implications for Nigeria's tech industry and broader economy. Initially launched with over 120 engineers and growing to more than 200 staff members, the center aimed to recruit 500 full-time engineers by the end of 2023. Gafar Lawal, Managing Director of Microsoft ADC West Africa, had previously expressed optimism about the talent pool in Africa. The closure not only affects the engineers and staff directly but also has ripple effects on various sectors including printing presses, HMOs, brand communication firms, audit firms, and stationery vendors. This development underscores the challenges foreign investors face in Nigeria's current economic climate and raises concerns about the future of innovation and job creation in the country.

Management Quotes

• Microsoft spokesperson:

  "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."