Job cuts do not concern Nestlé South Africa
Following reports on Wednesday that Swiss food and drinks company Nestlé will cut 15% of its workforce in 21 African countries, Nestlé South Africa has clarified that these job cuts do not concern South Africa.
Nestlé South Africa said on Thursday that the South African region was Nestlé’s fastest growing market in Africa, achieving double digit growth in the first quarter of this year.
The company, which had been present in South Africa for almost 100 years, stated that it remained committed to the country.
Meanwhile, “contrary to the media reports, there was a 7% reduction in the workforce in the equatorial African region (EAR)”, the company advised. This did affect around 60 people, as reported, but only across five of the 21 countries in the region, with Nestlé’s four factories in the EAR unaffected.
The Financial Times (FT) had reported that Nestlé was pulling back because it overestimated growth in the middle class, with Nestlé’s EAR CE Cornel Krummenacher telling the newspaper that: “We thought this would be the next Asia.” But, he noted that the company realised that the region’s middle class was extremely small and not really growing.
In the FT report, Krummenacher had also said Nestle would be lucky to reach annual growth of 10% in the EAR in future years and, with the job cuts, hoped to break even next year.
The EAR currently accounted for 10% to 15% of Nestlé’s business in Africa, where the company currently employed 11 000 people.
Accounting for well over half of Nestlé’s business in Africa was the Central and West African region (CWAR), which, the company advised, had generally seen good growth. “Nestlé’s food and beverage business in CWAR, in particular, is thriving and is among the largest in the Nestlé group worldwide.”
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