Swiss food and drinks company Nestle (NESN.VX) is cutting 15 percent of its workforce in 21 African countries, the company confirmed on Wednesday.
A Nestle spokesman told Reuters the job cuts would affect about 60 workers in the equatorial Africa region after the Financial Times reported that the company is pulling back because it overestimated growth in the middle classes.
"We thought this would be the next Asia, but we have realized the middle class here in the region is extremely small and it is not really growing," Cornel Krummenacher, chief executive for Nestle's equatorial Africa region, told the newspaper.
Nestle has about 11,000 employees in the whole of Africa, the spokesman said, with the equatorial Africa region encompassing 21 countries including Kenya and Angola.
Krummenacher also said in the FT that Nestle would be lucky to reach annual growth of 10 percent in the equatorial Africa region in future years and, with the job cuts, hopes to break even next year.
A spokesman for the South African unit of the company, who noted the region was its fastest growing African market, said it would not be cutting jobs.
Nestle employs more than 3,000 people in what is considered Africa's most advanced economy.
Nestle shares closed lower on Wednesday, down 0.58 percent (NESN.VX).
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