Why did Microsoft close its $100 million engineering center in Nigeria?

While Microsoft’s side of its AI business is thriving, the Redmond tech giant is reportedly forced to close a few doors in Nigeria. 

The closure, which The Guardian Nigeria initially reported, involved an engineering center, or the African Development Center (ADC), in Lagos, the country’s capital. A little over 100 engineers have been said to be affected by the decision, just two years after its inauguration.

“While the immediate cause of the shutting down of the ADC remains sketchy, industry sources claimed that it might be due to the current economic situation in the country,” the report reads.

Bloomberg recalls that it’s not the first exit that happened in recent times in Nigeria as the country has been fighting an economic crisis since the pandemic with the highest inflation rate in over two decades. A Microsoft spokesperson told the publication that the change is “necessary” and a “regular part of managing our business.”

Lagos’ ADC is one of the two only centers that operate in the continent. The second center, located in Nairobi, Kenya, is not affected. Both of these centers were a part of Microsoft’s $100 million investment years ago.

“Engineers have already started working, and we intend to recruit 100 full-time engineers by the end of the year – expanding to 500 across the two sites by 2023,” said Microsoft at that time.

The report ironically coincides with the closure of some of Microsoft-owned Bethesda’s studios. This reorganization effort involves Redfall maker Arkane Austin, Hi-Fi Rush developer Tango Gameworks, and Might Doom creator Alpha Dog Studios.