Tongaat Hulett Zimbabwe, one of the country’s largest employers, has announced plans to lay off 1,000 employees by August as part of a cost-cutting strategy aimed at navigating the challenging economic climate in Zimbabwe.
The sugar producer, which operates two major sugar mills in the country, has been grappling with a significant rise in input costs, including labor and fertilizer, exacerbated by the country’s ongoing economic instability.
“This difficult decision is driven by the need to enhance operational efficiency and counter plunging profit margins and soaring expenses,” a company spokesperson, Dahlia Garwe, told Reuters. 
Since 2022, profit margins for the company have declined by 55%, while labor costs have surged by 113%. These mounting pressures have necessitated a restructuring of operations to ensure the company’s long-term sustainability.
It’s important to note that this restructuring is a separate initiative from the ongoing business rescue process of the South African parent company, Tongaat Hulett Limited, which has been grappling with an accounting scandal.
The Zimbabwean assets are currently being sold to a Mauritius-registered company as part of this broader restructuring plan.
The layoffs will be implemented in three phases, with 500 employees from each of the company’s two mills affected. This decision is expected to have a significant impact on the local economy, as Tongaat Hulett is a major employer in Zimbabwe.
[Reuters]
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