Anxiety as more companies lay off staff, reduce production

The gale of retrenchment that has been coursing through Nigeria continued unabated over the weekend as more companies laid off their staff.

Sunday Tribune learnt at the weekend that Dansa Foods, one of the companies in the Dangote Group, has not only scaled down its operation and laid off staff, but is also owing its employees up to six months in salaries.

According to a report by PM News on Saturday, the company has been forced to limit its production activities to only Mowa Bottle Water while suspending the production of other items as a consequence of high cost of production occasioned by high exchange rate of naira to the dollar.

Sunday Tribune also gathered that an Ibadan-based food manufacturing company had scaled down its staff strength as well as its production level considerably, due to its inability to source raw material.

An employee of the company confided in Sunday Tribune that since the ban on wheat, the company had been facing serious challenges as it had found it difficult to access flour, its major raw material, a situation that had compelled it to cancel its multi-shift operation.

According to the employee who pleaded anonymity, “For over six months now, we have not been able to meet our production target because of our inability to get the critical raw material. As a result of this, our production has gone down. We no longer work on weekends and this has resulted in many of our staff being disengaged. Every remaining member of staff is worried about the trend as we are not sure who would be spared should this trend continue.”

Although the employee said that the company was still paying salaries, he regretted that all other perks had been cancelled.

The development underscores the fact that the food and beverage industry appears especially hit by the inclement economic weather which has rendered many companies in the country comatose.

Earlier in the year, the Food, Beverage and Tobacco Senior Staff Association (FOBTOB) had lamented that about three million workers in the sector could lose their jobs as major companies in the sector had concluded plans to massively sack their staff because of their inability to access forex and raw materials.

According to Quadri Olaleye, FOBTOB president, already no fewer than 3,405 workers had lost their jobs in the sub-sector.

But the development is not restricted to the food and beverage sector as even banks have been sacking their employees.

Earlier in the year, Diamond Bank Plc sacked about 200 members of its workforce. Explaining the reason for the development, the bank said it was rightsizing. It said the rightsizing was a core strategic exercise in line with the bank’s growth objective “and the will to continue the drive to optimise cost and enhance value for the shareholders at the end of the business year.”

Ecobank Nigeria also sacked over 1,000 of its employees. While confirming the development, the bank said the initial list of those to be sacked had over 1,400 workers but it was later reduced to “a little above 1,000.” It added that about 200 casual staff had their appointment regularized as they were absorbed fully into the bank.

Other banks have also had to retrench some of their staff in the course of the year. These include First Bank, FCMB and Unity Bank, among others.

The disengagement of bank employees attracted the ire of the Minister of Labour and Employment, Dr. Chris Ngige, who issued a statement directing the lenders to stop disengaging their staff.

That has put a stop to the trend in the industry at least for now.

The aviation sector has also had a taste of the bitter pill of mass sacking as quite a number of employees in the industry have had their appointments terminated following the relocation out of the country by some of the operators as a result of the difficulty they encounter with sourcing aviation fuel and repatriating their sales to their headquarters. Iberia and United Airlines are some of the airline operators that have stopped flying into Nigeria.

The media industry has not been spared either as quite a number of newspaper companies have had to lay off their staff.

Two other Lagos-based media outfits are also reportedly about to sack hundreds of their staff in the days and weeks to come as they cold no longer cope with paying salaries.

The major challenge of newspaper companies in the country is with sourcing their major production inputs such as newsprints, films and inks, all of which are imported. The exchange rate of naira to the dollar has made the cost of these items prohibitively expensive.

One of the companies in the industry that recently sacked some of its workforce premised it on the high cost of production “which has made it impossible for us to retain the current wage bill.”