In South Africa, Tiger Brands is reducing sail area. The company affected by the coronavirus-related economic downturn plans to cut 400 jobs as part of its cost-cutting strategy to cope with falling consumer purchasing power.
South Africa's Tiger Brands, one of the continent's leading consumer goods manufacturers, will cut up to 400 jobs as a result of the economic impact of the coronavirus.
According to details relayed by Bloomberg, the downsizing will fairly affect staff at the company's headquarters in Johannesburg and employees at sites of operation.
The company, which has been hit like its competitors by the decline in consumer purchasing power, plans to implement a plan to reduce operating costs by 500 million rand ($32 million) in its 2021 fiscal year.
"We need to set more competitive prices for our products and be more efficient in delivering our brands to consumers. We are confident that in such a challenging environment we can return to full growth in our 2021 financial year," said Noel Doyle, CEO of Tiger Brands.
In its 2020 financial year ended September 30, the company achieved sales of 29.8 billion rand ($1.93 billion), an increase of 4% over last year.
However, it recorded a profit of 1 billion rand, a significant drop of 73% compared to last year (3.89 billion rand).
It should be noted that Tiger Brands, which is facing lawsuits related to the listeriosis outbreak of 2017, could still drag this file out until 2022, as its management considers a settlement over the next 12 months unlikely.
Tiger Brands operates in several segments such as grain products, food products such as confectionery, snacks and groceries. With more than 10,000 employees, the company has a distribution network covering more than 20 African countries and is valued at nearly $2.5 billion.