Nestle SA, the Swiss transnational food and drink company, has announced plans to close the headquarters of its Equatorial Africa unit in Nairobi, Kenya by the end of July as part of its strategy to restructure its business in Sub-Saharan Africa.
Nestle said the Nairobi office, which employs over 100 people has been weighed down by high operation costs over the past decade gave the size of the business, reported Bloomberg.
The re-organization at the global food producer may see layoffs in Kenya as it plans to redistribute the responsibilities between the head offices of the two other regions on the continent in Accra and Johannesburg.
The company said it will expand the Southern African Region (ZAR) to include the Horn of Africa, Southern, Eastern and Island clusters of EAR to form an enlarged region to be headquartered in Johannesburg.
The new region will be renamed the Eastern and Southern African Region (ESAR).
“Our team in EAR has done a tremendous job, but after trying for nearly ten years we can no longer sustain the cost of the regional head office with the size of the business there.
“So, we plan to close the office at the end of July, redistributing the responsibilities between the head offices of the two other regions on the continent in Accra and Johannesburg,” said Nestle in a statement.
Despite of the changes in the continent, Nestle said the positions of those who work in the country/cluster offices across EAR are not affected by this closure of the regional head office.
In addition, the changes will not affect customers, trade, and wholesale partners, and suppliers said the company.
In 2015, the company’s move to retrench 46 employees was stopped by court claiming the firm discriminated against them.
The retrenchment of workers by the consumer goods manufacturer was embarked on after the announcement was by then chief executive Paul Bulcke in 2014 in a strive to improve margins through cost-cutting and investment in innovation.
This comes after a similar move in the home market, Switzerland where Nestle revealed plans to 500 computer-service jobs as Chief Executive Officer Mark Schneider aims to boost profitability.
With the re-organization, the Central West Africa Region (CWAR) will become a key market for the Nestle Group, effective August 1 2018.
Angola and the Democratic Republic of Congo, currently part of the Equatorial Africa Region (EAR), will also join Central West Africa Region.
The company said it intends to accelerate its digital transformation and to respond more quickly to fast-paced technological changes.