Tongaat Hulett Zimbabwe: Restructuring Amid Economic Turmoil

Tongaat Hulett Zimbabwe plans to lay off 1,000 employees by August to manage costs amid economic instability. The company, one of the largest employers in Zimbabwe, faces soaring labor and fertilizer costs. The restructuring is part of a survival strategy amidst ongoing currency and inflation challenges in the country.

Tongaat Hulett Zimbabwe is set to lay off 1,000 employees by August, aiming to manage costs in the wake of Zimbabwe's severe economic challenges, a company official revealed.

Ranked among Zimbabwe's largest employers with 16,000 workers, the sugar producer has been hard-hit by escalating labor and fertilizer costs, amidst currency losses driven by the country's unstable fiscal environment. Tongaat Hulett manages two major sugar mills in the nation, collectively processing 3.5 million tons of sugar cane annually. The layoffs will occur in three phases, impacting 500 employees from each mill, spokesperson Dahlia Garwe told Reuters.

This decision is driven by a need to enhance operational efficiency and counter plunging profit margins and soaring expenses. Since 2022, profit margins have fallen by 55%, while labor costs rose by 113%, contributing to significant debts. The layoffs are a strategic move to stabilize operations amidst unprecedented challenges, unrelated to its South African parent company's business rescue process following an accounting fraud scandal. The Zimbabwean assets are being sold to a Mauritius-registered company as part of a broader business rescue plan.

(With inputs from agencies.)