Microsoft’s Nairobi Engineering Hub faces closure: The $100 million bet and jobs at risk

Microsoft’s restructuring has reached its Nairobi engineering operation, with employees reporting that they were told on October 12 that their jobs were going.

The company has confirmed that proposed changes under its global restructuring have affected its engineering department in Kenya, but says it will continue operating in the country and serving regional customers.

The uncertainty concerns the Africa Development Centre (ADC), Microsoft’s specialised engineering hub in Westlands.

The company has not announced the number of positions affected or provided a final timeline for the changes.

ICT Cabinet Secretary William Kabogo met a Microsoft delegation led by senior company officials on October 12.

He said he had pressed the company to protect local engineering jobs and retain technology talent, with both sides expected to develop an action plan covering artificial intelligence, digital government services, cybersecurity and skills development.

A $100 million investment

Microsoft launched its Africa Development Centre in Nairobi and Lagos in May 2019, promising to invest US$100 million over five years and recruit 500 engineers across the two locations by 2023.

The goal was to place African engineers directly inside Microsoft’s global product-development operation rather than limit local technology jobs to sales, customer support and marketing.

The centres were intended to work on areas including artificial intelligence, machine learning, cloud services, mixed reality and software development.

Microsoft said it wanted the investment to support both local innovation and products used around the world.

By March 2022, the Nairobi centre had more than 450 full-time employees, according to Microsoft.

The company said it had met its combined hiring target across Nairobi and Lagos ahead of schedule.

The Nairobi teams subsequently contributed to global products and development tools, including work connected to Microsoft identity systems, Microsoft 365 and developer infrastructure.

The centre was more than a local office: its engineers were part of the teams building and maintaining products used internationally.

Lagos closed first

The current developments follow Microsoft’s decision to close its Africa Development Centre in Nigeria in May 2024.

At the time, the company explicitly said that the Nigerian decision would not affect the Kenyan centre.

Nairobi consequently remained the principal engineering location after the Lagos closure.

Microsoft later referred to its Nairobi centre as having approximately 500 employees when announcing a broader digital investment initiative with Abu Dhabi-based G42 in May 2024.

The Kenyan operation also housed Microsoft Garage, an innovation programme, and shared space with Microsoft Research Africa.

Microsoft has not publicly clarified whether the current engineering changes affect all activities at the Westlands location or only particular teams.

What happens to affected employees?

The immediate concern is what the proposed changes mean for engineers, researchers and other employees whose positions may be eliminated.

Under Section 40 of Kenya’s Employment Act, employers declaring redundancies must follow prescribed notification and consultation procedures.

These include notifying affected employees or their union, as applicable, and the labour officer.

The law also provides for payment in lieu of notice, accrued leave and severance of at least 15 days’ pay for every completed year of service, subject to the applicable statutory conditions.

The final entitlements of individual Microsoft employees would depend on their circumstances, their contracts and the terms of any separation arrangement.

Kenya’s technology investment question

Microsoft’s proposed changes come amid wider global restructuring across the technology industry.

But the effect on Kenya reaches beyond one employer.

The ADC represented an opportunity for local engineers to gain experience developing international products, build intellectual property and work within a global research and engineering environment without relocating abroad.

Microsoft says it remains committed to Kenya and will continue supporting customers in the region.

What remains unresolved is the future of the engineering operation that formed the centrepiece of its original US$100 million commitment.

The company’s final decision will determine how much of that capability stays in Nairobi and how many experienced engineers will need to find new roles.