Compared to the prior year, Fast Moving Consumer Goods (FMCG) companies have experienced a decrease in their workforce size in 2023.
Some consumer goods companies registered on the Nigerian Stock Exchange (NGX) have full-year 2023 financial statements available for examination. According to these financial statements, the number of employees decreased by 1,297 in 2023, from 14,875 to 13,578. This indicates a decrease of 8.7% over the time frame.
By eliminating 515 employees in 2023, Flour Mills Nigeria Plc experienced the largest decline in employee headcount, going from 5,919 at the end of the 2022 fiscal year to 5,404 by the end of 2023. This represents an 8.70% decrease throughout the time.
The largest brewery, FMN, was followed by Nigerian Breweries, which cut staff by as much as 14.15% in 2023, from 2,685 at the end of 2022 to 2305.
During that time, other companies that cut staff were;
- Cadbury Plc: In 2022, the company’s total workforce consisted of 480 employees. By the end of the year, this number had decreased to 459, representing a slight decline of 4.34%.
- Dangote Sugar: In 2023, the company’s workforce decreased by 70 employees, from 3,066 in 2022 to 2,956.
- Guinness Nigeria Plc: By December 2022, the employee headcount at Guinness Nigeria was 839. This figure dropped to 791 in December 2023, reflecting a reduction of 48 employees.
- Unilever Nigeria Plc: In 2023, Unilever Nigeria reduced its workforce by a significant 22.3%, from 786 employees at the end of 2022 to 610 by December 2023.
- PZ Cussons: The company experienced a slight decline in its workforce, with employee numbers dropping from 1,040 in 2022 to 996 in 2023, a reduction of 44 employees.
- Northern Nigeria Flour Mills: This company saw a minimal reduction in its workforce, with only three employees leaving in 2023, decreasing the total headcount from 60 in 2022 to 57 in 2023.
The impact of the nationwide macroeconomic shocks that year is what caused the 2023 employee headcount fall. From 21.82% in January 2023 to 28.92% in December 2023, the rate of inflation increased by 7.1 percentage points.
Furthermore, once the Central Bank of Nigeria (CBN) implemented considerable reforms, the value of the Naira fell to an all-time low on the official market. The naira closed at N460$ in January 2023; by the end of the year, the exchange rate had dropped to N907/$, surpassing the N1000/$ threshold.
One of the industries most severely impacted by the economic shocks of 2023 was the consumer products industry. Major consumer products companies reported N839.2 billion in foreign exchange losses for the year, according to earlier research by The News Chronicles.
Multinational corporations significantly leave Nigeria as a result of the losses suffered by consumer products companies as well as the country’s macroeconomic woes. According to a previous report by the Manufacturers Association of Nigeria (MAN), 767 manufacturing enterprises shut down in 2023, and the industry’s unsold inventory was valued at over N350 billion.
The group also pointed out that the industry lost nearly 3,500 employees in the first half of 2023 alone.
What this implies
It is anticipated that the country’s unemployment rate will rise as a result of the job losses in the consumer goods industry. Even though listed corporations have reported relatively little employment losses, unlisted enterprises have reported far larger losses.
According to data from the National Bureau of Statistics (NBS), the nation’s unemployment rate increased by 0.8 percentage points in Q3 2023, from 4.2% to 5.0%.
Based on data from the Purchasing Managers’ Index (PMI) and the Central Bank of Nigeria (CBN), Nigerian firms continued to cut staff in 2024 as a response to the present economic climate.
It is anticipated that the personnel reduction in consumer goods companies will have a substantial effect on the sector’s capacity utilization. According to the Manufacturers Association of Nigeria (MAN), the sector’s capacity utilization has decreased to 56.5%.
For instance, Nigeria Breweries declared earlier this year that it would be closing two of its nine production facilities in the nation.
Additionally, in 2023, Unilever Nigeria Plc declared that it would cease manufacturing its line of skincare and cleaning products, which included the well-known OMO detergent, Sunlight, and Lux soaps.
Uncertain future in 2024
Consumer goods companies’ fate in 2024 appears dubious because the effects of the macroeconomic downturn from 2023 are still very much apparent.
The year’s inflation increased from 29.90% in January to 33.40%, along with significant fluctuation in the exchange rate, which is currently trading at about N1600/$ on the official market.
