Seven firms, including Dangote Sugar Refinery, Unilever Nig Plc and Nigerian Breweries have seen their combined workforce reduce by 1,281 between 2022 and 2023, according to findings by The PUNCH.
This is according to an analysis of the firms’ annual reports which details the change in workforce statistics after every financial year.
The job cuts implemented by the firms are reflective of sacked workers and also members of staff who left voluntarily but have not been replaced due to strategic business reasons.
According to the data, Dangote Sugar Refinery led the line, cutting its workforce by 675 (workers).
A breakdown of the company’s employee data showed that in 2022, the company had 8,993 employees, including 6,015 contract employees and 2,978 permanent employees. By 2023, the number shrunk to 8,318, comprising 5,408 contractors and 2,910 permanent staff.
While speaking at the company’s Annual General Meeting last week, the President of Dangote Industries Limited, Aliko Dangote said that the depreciation of the local currency was the company’s biggest challenge in 2023.
According to him, the domestic operating environment was harsh, being an election year that saw a new government sworn into office on May 29, 2023.
The business mogul also noted that many manufacturing companies were affected and reported operational losses arising from fluctuations in the value of the Naira against the US dollar.
In the same vein, Nigerian Breweries cut its workforce by 14 per cent, from 2,685 employees in 2022 to 2,305 in 2023.
The Managing Director of the company, Hans Essaadi, during the brewer’s pre-AGM media briefing which was held recently in Lagos had said that the strain caused by the forex crisis and other economic shocks forced the company to embark on a rightsizing exercise at the end of the first quarter of 2023.
According to him, high forex rates, decreased consumer demand, and increased gasoline prices left a devastating mark on its 2023 financial performance.
He noted that other factors that played a contributory role in tanking the company’s profit by 859.6 per cent included high food inflation, which affected the price of sorghum, decreased consumer demand due to eroding disposable income, and the cash scarcity that was experienced in the first quarter of 2023.
He said, “The devaluation of the naira put a strain on our balance sheet and also had an impact on our P & L.
“The unavailability of the dollar meant that we had to go to the parallel market to make sure that we could pay the bills of our suppliers. This again put additional stress on our balance.
“When we made our plan for 2023 in September 2022, nobody could have foreseen the sequence of events that we witnessed in 2023.”
He noted that the company had launched a strategic plan which aims to set it on a path of recovery and growth.
“We are one of the largest listed companies in Nigeria, we need to get back to some form of predictability,” he added.
Last month, the beer-maker said it would undertake a company-wide rejig of its operations in response to a host of financial and operational difficulties, in a note to the Nigerian Exchange Limited.
This rejig will involve a shutdown of two plants as the company continues to find ways to recover from the huge loss incurred in the 2023 financial year. With the shutdown, more workers are expected to be laid off.
Similarly, multinational manufacturer, Unilever Nigeria Plc’s reduced its workforce by 176 in 2023.
In March 2023, the company announced it would be exiting the home care and skin cleansing markets to reposition its business for sustained profitability. Production and Sales for Home care and Skin cleansing business categories ceased in December 2023.
The statement by the manufacturer said that it was changing its business model to accelerate the growth of the company and meet the needs of consumers, shareholders, and employees better.
As a result of the discontinuation of two of its major categories, the company lost about N3.726bn in the 2023 financial year, per its annual report.
Another multinational manufacturer, Cadbury Nigeria cut its workforce from 480 in 2022 to 459 in 2023. The company has been mired in a foreign exchange crisis that has left a devastating mark on its financials in the last year.
In 2023, the group recorded a N36.9bn foreign exchange loss, effectively resulting in a retained loss of N11.4 bn and a negative equity of N6. 5bn.
To cushion the impact of the forex losses plans to convert foreign-currency loans from parent Cadbury Schweppes Overseas Ltd. into equity to cut higher financing costs caused by the devaluation of the naira.
The beverage and confectionery sought shareholder approval on Feb 8 to convert an outstanding $7.7m, according to a filing to the Nigerian Stock Exchange.
The debt-to-equity conversion “will help reduce the company’s exposure to foreign exchange risk and its impact on earnings,” Cadbury said.
Also, 19 staff members lost their jobs in 2023 at Conoil Plc after the company made significant revenue and profits over the year.
Conoil Plc, unlike many companies that cut down their workforce, grew revenue by 53.2 per cent to N201.387bn in the full year 2023 from N131.422bn recorded in the corresponding period of 2022.
Profit of the oil marketer also grew in the same direction, rising by 94.2 per cent to N9.625bn in 2023 from N4.957bn reported in the same period of 2022.
However, the number of employees of the company reduced to 149 in 2023 from 168 reported in 2022.
Also joining the list of companies that cut down their workforce in 2023 is Africa Prudential, which reduced its staff strength from 89 in 2022 to 80 in 2023. It remains unclear if the minor housecleaning is connected to the drop in Profit After Tax from N1.4bn in 2022 to N962m in 2023.
For International Breweries, the company’s workforce in 2022 and 2023 remained fairly identical, slightly reducing from 1553 to 1552.
However, there was significant movement in relation to the number of management staff within the period in review. To cut costs, the company strategically trimmed down its management personnel, from 761 in 2022 to 429 in 2023.
Like many of its counterparts in the brewing business, the company incurred a loss of N70bn in the 2023 financial year.
Cumulatively, all seven firms cut 1,281 jobs in 2023.
Speaking with The PUNCH, the Chief Executive Officer of the Centre for the Promotion of Private Enterprise, Muda Yusuf blamed the harsh business environment being faced by businesses for the job cuts.
According to him, many businesses in Nigeria are being faced with the impossible choice of reducing staff strength to keep the business alive.
He said, “The business has to be kept afloat. These are business decisions. We know the challenges businesses have gone through in the last year. It has been very difficult. We can see the losses that many of them have posted.
“So. If you are faced with that kind of challenge, and you don’t have an option to see how to reduce costs. One of the ways to cut costs is to reduce staff strength. We have seen the instance of Nigerian Breweries that is shutting down some plants.
If you shut down some plants, there is no way that workers will not be asked to go. These are business strategy issues to remain afloat because the past year has been extremely challenging.”
SOURCE: PUNCHNG
