Unga Holdings Limited, the manufacturer of popular maize flour brands like Jogoo and Hostess, announced plans Thursday to lay off up to 50 employees due to financial struggles exacerbated by tough economic times in Kenya.
“Our volumes and margins are down. Our sales, particularly for the Unga Limited business, have been below budget consistently, resulting in low capacity utilization and high fixed costs that are no longer sustainable,” said Joseph Choge, Unga’s group managing director, in a letter to employees.
The layoffs would affect workers “in different locations and departments” across the company’s multiple business units, Choge said. He added that Unga aims to “minimize the number of employees affected” through voluntary redundancies first before resorting to compulsory layoffs if necessary.
Affected employees will be selected based on “objective and quantifiable selection criteria that will include skill, ability and reliability,” the letter states.
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Unga Limited manufactures products for both consumer and commercial bakeries. Its popular maize flour brand Jogoo holds a majority market share in Kenya.
The company has struggled amid rising costs, supply chain disruptions and lower sales volumes compared to pre-pandemic levels, Choge said. He pointed to the high inflation, rising fuel and production costs impacting businesses across Kenya.
“We have worked on several initiatives to bring our costs in-line with anticipated business performance but…it has become apparent that we also need to restructure our organization,” Choge wrote.
The company said it would provide support services to affected employees.
