IHS Towers, a major telecoms infrastructure provider, has laid off over 100 employees, with senior staff and the network surveillance team most affected by the cuts. The company, which operates more than 40,000 towers across Africa — accounting for about 25% of the continent’s tower infrastructure — stated that the layoffs were necessitated by harsh economic conditions, rather than the performance of the affected employees.
Many of those laid off had served the company for over a decade and were compensated with substantial severance packages.
The decision comes on the heels of a staggering $1.9 billion loss reported by IHS Towers in 2023, representing a 304% increase from the previous year’s losses. The company has attributed this financial downturn primarily to the severe devaluation of the Nigerian Naira, which resulted in significant foreign exchange (FX) losses. This economic hit has severely impacted the company’s profitability, forcing it to make tough decisions to remain afloat.
IHS Towers has faced increasing pressure from investors since 2022, particularly after a shareholder raised concerns about an unexplained $1.5 billion listed under investing activities in the company’s cash flow statements. This scrutiny has added to the challenges the company faces, especially in light of the recent financial losses.
The devaluation of the naira has been particularly damaging for IHS Towers, costing the company $409 million in the last quarter of 2023 alone. This financial blow, combined with FX losses from US dollar-denominated loans, has significantly eroded the company’s revenue and overall financial health.
Despite a slight recovery in its share price to $3.56 in August 2024, IHS Towers’ market capitalization has plummeted to $1.3 billion, a dramatic decline from its $6 billion valuation in 2021 when its shares traded at $21. The company’s current financial woes highlight the challenges faced by businesses operating in volatile economic environments, particularly those with significant exposure to currency fluctuations.
The layoffs at IHS Towers reflect a broader trend of cost-cutting measures being implemented by companies across various sectors in response to challenging economic conditions. As the company navigates through this turbulent period, it will need to continue adapting its strategies to mitigate the impact of external economic factors on its operations and financial stability.