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Job Loss Looms At Nestle

Sam Diala, Afolabi Idowu and Joy Onyemaechi

Nigerian employees of Nestle Plc are in a state of discomfort following reports that the Swiss-originating food and drink giant plans to embark on a significant reduction of its work-force in Africa. This is to enable it to cope with the poor economic situation that has unfavourably affected its operations in the region. Cornel Krummenecher, Nestle’s chief executive for equatorial Africa region, had told the Financial Times in an interview at the regional headquarters in Nairobi, Kenya, last week that the job cut derived from poor results of theorganisation’s operations, which he attributed to a wrong forecast. “We thought this would be the next Asia, but we have realized the middle class here in the region is extremely small and it is not really growing,” Krummenecher disclosed rather disappointedly.

As expected, the disclosure has translated into an unfavourable tiding of worry and sadness for Nigerian employees of the giant beverage manufacturer who are known for their traditional disposition of continual delight and job satisfaction common with employees of the multinational, whose products constitute popular household brand. Investigations by The UNION at the company’s sprawling Agbara Estate (Ogun State) factory revealed that the report had sent shockwaves to the spines of the workers whose palpable mood of discomfort was obviously suppressed as the matter was mentioned for discussion. At vicinity of the factory’s main entrance in Agbara, the planned staff layoff dominated discussions by the employees who interacted with visitors as they savour the afternoon supply of cooked corn supplied by local farmers.

Those who spoke with The UNION informally expressed fears that the job cut might be implemented soonest as the rumour had been rife in recent past. They were also apprehensive of the fact that Nigeria being one of Nestle’s major locations in Africa, would not escape the hammer of “downsizing” because there is the perception that there are many hands in the place, a member of staff said. Attempt to reach Dr Sam Adeneko, Nestle spokesman, was not successful as his mobile phone was continually switched off while he did not respond to text messages forwarded to him at the time of filing this report. However, some operations staff who offered to speak on the matter requested that their names should not be in the report as they are not authorized to comment on the development.

A senior operations member of staff confirmed the development, but explained that the layoff would affect mainly those whose jobs are affected by the ongoing automation in the organization. The source disclosed that the service of many casuals and other support staff will be dispensed of this year as a result of the planned rationalization hinted in Krummenecher’s interview with Financial Times. “The approach really is not to retrench people that are emplolyed. The truth is that we are automating so we are laying off casuals. As we automate, we reduce casuals while the core staff will remain. That is the approach. For instance, if you have 12 people on a line and you need only two after the place has changed into automation, it means that 10 will go. “We have people that are in the factory floor who are not core people, they are not technical people, they are doing a job any man or woman can do.

Such ones will be laid off. But those that use their head (mental work) are not going to be laid off like that because the company has spent a lot to train them”, the contact said. Asked if the support staff like accounts, purchasing, administration would be affected, the senior technical member of staff said they may not be affected because “they are all part of the company and you don’t remove someone who has a job to do. You cannot carry 10 people’s job and give to one person, he will not be efficient.” The contact confirmed that the company is passing through some challenge, especially last year, which reflected in the company’s annual report for 2014. “Yes, the economy did not treat us good last year; it was a particularly difficult year, I must say. “Even for us the staff, the kind of increment that we used to have, we did not have.

We accepted it because it is better to be employed than not to be employed. Nigerian economy has not been very good; we only hope it improves because no one would like to lose his job.” A member of staff who also volunteered to speak unofficially to The UNION at the Ilupeju (Lagos) office of the company Friday, was emphatic that a “significant chunk” of the company’s employees will be laid off, not only casuals but permanent employees. According to him, the company has been passing through a lot of operating challenges which affected some of the welfare it used to extend to the staff. “Everybody is afraid, when the Whiteman says he will sack, he means it,” the senior employee said in a tone of worry. Some distributors of the company approached refused to comment on the matter; they would not respond on enquiries regarding the flow of the company’s products. An attempt to speak to the Mr Idowu Oyenekan, Chairman, National Union of Foods, Beverages and Tobacco Employees (NUFBTE) did not yield result.

His two mobile phones were switched off and he did not respond to text messages sent on the numbers. At the Dopemu (Lagos) national secretariat of the union, security guards refused to give out phone numbers of some of the executives. Shareholders at the Nestle Annual General Meeting (AGM) in Lagos last month did not withhold their displeasure at the poor performance of the company in 2014 business year. The company recorded a marginal increase in Turnover of N143.32 billion in 2014 as against N133.0 in the previous year. Profit Before Tax (PBT) dropped from N26.04 in 2013 to N24.44 in 2014; similarly Net Assets for 2014 was N35.93 billion against N40.59 billion in the previous.

The company’s performance in the capital market has not been encouraging. With an opening price of N1,011.75 on the first trading day in January, the stock closed N850.07 on Friday June 12, a loss of N161.68 representing 16 percent. A capital market operator, Mr Sola Oni of SofunixInvestcom said Nestle is faced with the challenges associate with the inclement operating environment characterized by high operating cost and weak purchasing power of consumers. Boniface Okezie, President, Progressive Shareholders Association of Nigeria(PSAN) warned against laying off Nigerian employees at Nestle. “They can lay off the expatriates but not Nigerians. Why must they retrench in the first place?

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