Multinational food and beverage company Nestlé has announced plans to close its regional office in Nairobi at the end of July this year. “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,” read a statement released by the firm.
The Equatorial Africa Regional (EAR) office that is set to be closed controls operations in Rwanda, Republic of Congo, Somalia, Zambia, Zimbabwe, Southern Sudan, Madagascar, Mauritius, Malawi, Seychelles, Comoros, Djibouti, Eritrea, Ethiopia, Burundi, Angola, Uganda, Tanzania and DRC.
Under the new structure, effective August 1, 2018, the Central West Africa Region (CWAR) will be expanded to include Angola and the Democratic Republic of Congo. While the Southern African Region (ZAR) will be renamed to Eastern and Southern African Region (ESAR) and will include the remaining countries of the Equatorial Africa Region (EAR); in the Horn of Africa, Southern, Eastern and Island regions.
The expanded CWAR region will be headquartered in Accra Ghana while the renamed ESAR in Johannesburg South Africa. Responsibilities of the closed regional office will be redistributed between the two regions.
The firm stated that the positions of employees in the country offices throughout the EAR would not be affected by the closure of the regional office. Additionally, consumers, suppliers, trade and wholesale partners within the affected region would not be impacted.
Nestlé was founded in 1866 and has grown to include over 2,000 brands while operating in 191 countries. The company stated its reason for the cutback from the EAR as high costs of operation that cannot be sustained by the size of the market in the region.
Nestlé has also announced plans to cut up to 500 jobs in its Switzerland home market in a restructuring plan meant to cut costs and boost profit. According to the firm’s Chief Financial Officer Xavier Roger, Nestlé expects to incur $ 706 million in reorganisation costs in 2018.