Microsoft Reportedly Shutting Down ADC Nigeria, Sparking Concerns for Kenya Offices

Microsoft is reportedly preparing to close its African Development Centre (ADC) in Lagos, Nigeria, according to sources. This development, first reported on May 7, 2024, comes as a shock to the employees and the broader tech community, as the centre was inaugurated in 2022 under a significant $100 million initiative to foster local tech talent and innovation. Although there has been no official confirmation from Microsoft regarding the closure, reports indicate that the staff was abruptly informed of this potential decision earlier this week.

The Lagos ADC, aimed at recruiting hundreds of engineers to develop solutions in sectors like fintech, agritech, and off-grid energy, quickly became a symbol of Microsoft’s commitment to tapping into African talent. At its launch, the centre boasted over 200 staff members, including 120 engineers, with ambitions to expand further. It is not yet confirmed why Microsoft would even consider shutting down the Lagos facility, but industry insiders speculate that the challenging economic conditions in Nigeria could be a driving factor.

According to reports, affected employees are expected to receive their salaries until June, and their health insurance coverage is to be maintained during this uncertain period. This potential closure does not appear to affect Microsoft’s operations in East Africa, particularly the ADC facility in Nairobi, Kenya.

However, the news from Lagos has raised concerns among the staff at the Nairobi ADC, who are reportedly anxious and seeking clarity about the future of their own positions. Speculation about the Lagos closure has sparked fears that the Nairobi center might also face challenges, despite its recent relocation to a new, ultra-modern facility in March 2022.

The Nairobi ADC, now housed at Dunhill Towers along Waiyaki Way, includes over 450 full-time employees and features entities like the Microsoft Garage and the Microsoft Research Institute (MARI). The centre is considered a cornerstone of Microsoft’s commitment to developing technology solutions that can address local and global challenges, reflecting the company’s strategy to integrate deeply with the local tech ecosystems and academic institutions.

Timeline of Microsoft ADC in Africa:

• May 2019: Microsoft announces the launch of its $100 million African Development Centre initiative, with plans for two major facilities in Nairobi, Kenya, and Lagos, Nigeria. The initiative is aimed at tapping into Africa’s burgeoning tech talent and fostering innovation in critical sectors.
• March 2022: The ADC Nairobi relocates to a new, state-of-the-art facility at Dunhill Towers along Waiyaki Way, demonstrating Microsoft’s continued investment and faith in the region’s tech potential.
• 2022: Official operations commence at the ADC in Lagos, Nigeria, with the center quickly scaling to over 200 employees, including 120 engineers, aimed at driving innovation across various tech sectors.
• May 7, 2024: Reports emerge about the potential shutdown of the ADC in Lagos, Nigeria, with employees allegedly informed abruptly about the closure plans, sparking uncertainty and concerns over the future of Microsoft’s other investments in Africa, particularly in Nairobi.

The broader implications of the ADC closure are significant, as Microsoft has also just announced layoffs and the shutdown of several gaming studios globally. These changes are part of the company’s strategic realignment to focus on high-impact projects and maintain a sustainable cost structure amid competitive pressures in the tech industry. The ADC in Nigeria, despite its short lifespan, was part of this expansive vision, which makes its potential closure a notable setback in Microsoft’s otherwise flourishing engagements in Africa.

As the tech community watches closely, the uncertainty over the ADC Nigeria underscores the volatile nature of global tech investments in Africa and raises questions about the long-term sustainability of such ambitious projects in economically challenging environments. This situation leaves the future of Microsoft’ best on Africa, particularly in Nairobi, hanging in a balance of strategic decisions made thousands of miles away, highlighting the complexities of global operations in emerging markets.