Nestle cuts 15% of its Africa Workforce

According to the Financial TimesNestlé, the biggest food and drinks company, is cutting 15 per cent of its workforce across 21 African countries because it says it overestimated the rise of the middle class.The company’s cutbacks in Africa have included the closing of its Rwanda and Uganda offices

Some Nestle's products_ Photo by wallary_com2

“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,” Cornel Krummenacher, chief executive for Nestlé’s equatorial Africa region, told the Financial Times in an interview.

Mr Krummenacher said turnover in the region had failed to deliver in line with initial growth forecasts set out in 2008, when Nestlé, which has invested close to $1bn in Africa in the last decade, stepped up its expansion in the region. Since then it has built a clutch of new factories, aiming to double its business every three years.

Instead, so far this year, Nestlé has closed its offices in Rwanda and Uganda entirely, is reducing its product line by half, and might close some of its 15 warehouses before September. Mr Krummenacher said the company would be lucky to reach annual 10 per cent growth in future years.

Nestlé suffered its latest blow when it was forced to withdraw Indian-manufactured Maggi noodles stocked by two east African suppliers after news of a food safety scare in India reached Kenyan health officials.