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Home Business Andela transitioning full-time engineers into contract workers to cut costs

Andela transitioning full-time engineers into contract workers to cut costs

by Charity Mbaka
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Andela is doing away with full-time developer jobs, as it transitions its workforce into gig workers. Current engineers/developers will be transitioned into contractors, afterwhich they will only be paid when they are staffed.

A statement from the company read, “We announced last week that we would be allowing engineers to choose whether they wanted to continue as full-time employees or convert to contractors,” the company explained, “They will only be paid when they are working, but not when they aren’t.”

The move will also see developers earn wages, as opposed to salaries.

The company says that working on a contract basis will allow the engineers more flexibility and the opportunity to earn a higher compensation.

New entrants into the Andela Network of engineers will be provided the option to explore a long term contractor option.

The shift into the gig economy does come with a few downsides for the contractors, who will see their company benefits such as health insurance cease. On the bright side, they will also cease to pay the 30% PAYE tax and start paying a contracting tax of 25%.

This is the next step in the American company’s evolution towards being a fully remote, software talent marketplace.

Earlier this year Andela laid off several junior engineers across four locations. The move saved the company up-to US$ 5 million. Company directors also took salary cuts ranging between 10-30% which saved them an additional US$ 25 million in operational costs.

Soon after Andela closed all its physical locations, sold equipment and asked engineers to work from home. The only remaining physical location is a sales office.

Read also: Andela’s remote future as an Upwork for longterm engineering tasks

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