Sugar producer Tongaat Hulett Zimbabwe has announced plans to lay off 1,000 employees by August 2025 as part of a cost-cutting strategy to navigate the country’s ongoing economic challenges. The move comes as the company grapples with soaring labor and fertilizer costs, currency volatility, and inflationary pressures.
Dahlia Garwe, the company’s spokesperson, confirmed the decision, stating that 500 workers from each of Tongaat’s sugar mills in Hippo Valley and Triangle will be retrenched in three phases starting February. "It is very difficult to manage such a large workforce, so we need to look at ways and means of becoming a lot more efficient in how we do our business," Garwe told Reuters.
Operating two sugar mills with a combined annual capacity to process 3.5 million tons of sugarcane, Tongaat Hulett Zimbabwe employs 16,000 workers, making it one of the country’s largest employers. However, profit margins have dropped 55% since 2022, while labor costs have surged by 113%, leaving the company burdened with significant debt.
"We need to bring our costs under control and put the company on a sustainable path," Garwe added, emphasizing that the layoffs are part of a broader strategy to stabilize operations.
Despite its financial woes, Tongaat Hulett Zimbabwe clarified that the challenges are independent of the business rescue process initiated by its South African parent company in October 2022, following an accounting fraud scandal.
As part of the South African business rescue plan, Tongaat Hulett is in the process of selling its Zimbabwean assets. These include the wholly owned Triangle Sugar Estates and a 50.3% stake in Hippo Valley Estates, which are being transferred to a Mauritius-registered investment company.
Businesses in Zimbabwe continue to face prolonged economic instability marked by hyperinflation and a volatile currency. These conditions have heavily impacted Tongaat Hulett Zimbabwe’s operations, mirroring the broader challenges faced by companies across the country.
The layoffs underscore the dire state of Zimbabwe’s economic environment and the measures businesses are being forced to adopt to survive.