IHS Towers lays off 100 employees amid Nigeria’s economic challenges

• Published On: 20 August 2024 at 20:38

IHS Towers, the world's fourth-largest independent tower company, has laid off over 100 employees as currency devaluation in Nigeria, its largest market, continues to erode profits.

According to TechCabal, the layoffs impacted several departments, particularly senior employees and the network surveillance team.

Many of the affected senior employees had been with the company for more than a decade and were given generous severance packages. The source emphasized that the layoffs were caused by economic pressures rather than underperformance.

Investors have increased their pressure on the company since 2022 as a result of poor financial performance. In the fourth quarter of 2023, IHS Towers reported a $409 million loss, owing primarily to currency depreciation in Nigeria, which reduced revenues and resulted in foreign exchange losses from USD loans.

The company, which has 1,600 employees worldwide, reported a $1.9 billion loss in 2023, a significant increase over the previous year's losses. Its market capitalization has fallen to $1.3 billion, from $7.3 billion in 2021.

Although the company's stock price recovered slightly in August, reaching $3.56 from a low of $2.98 in July, it is still well below the $21 high seen in 2021.

IHS Towers operates over 40,000 towers throughout Africa, accounting for approximately 25% of the continent's tower infrastructure. These towers, leased to telecommunications companies such as MTN and Airtel, are critical to Africa's digital economy because they provide necessary internet connectivity.

However, the company's operations in Nigeria, which account for more than half of its revenue, have been severely hampered by rising fuel prices, maintenance costs, inflation, and foreign exchange volatility. In the first quarter of 2024, IHS Towers spent $88.8 million on power, its largest operating expense.

Gimba Mohammed, IHS Towers' director of government and external relations, revealed that the company spent over ₦14 billion to repair fiber cuts between 2022-2023. Despite these challenges, the company continues to invest heavily, spending more than $1.5 billion in cash on various activities last year, though some of these expenses are still unclear, according to a shareholder letter dated June 2023.