HARARE – Bakers Inn, a leading confectionery producer in Zimbabwe, is undergoing significant staff reductions following a major restructuring effort aimed at streamlining its distribution processes.
The restructuring comes in the wake of financial losses totaling US$1.08 million, prompting the company to revamp its operations to remain viable.
Previously, Bakers Inn managed its logistics independently through Bakers Inn Logistics (Pvt) Ltd, a subsidiary of Innscor Africa Limited. However, Simbisa Brands Limited, which owns Bakers Inn and was spun off from Innscor in 2015, has decided to consolidate its sales, distribution, and logistics operations under a unified management structure.
This operational merger has rendered several positions redundant, leading to widespread retrenchments across the company.
Documents obtained by Zimbabwe Independent revealed that rising operational costs and a challenging macroeconomic environment drove the restructuring. According to the documents dated July 1, Bakers Inn has been operating at a loss for the past two years, primarily due to exchange rate losses and rising business costs. The company reported an after-tax loss of US$1.08 million for the nine months ending March 31, 2024, and an audited loss of US$1.14 million for the year ending June 30, 2023.
One major factor contributing to the company’s financial struggles was the change in VAT (Value Added Tax) status for the baking industry, which shifted from zero-rated to exempt. This change alone cost Bakers Inn an additional US$110,000 in the first quarter of the year.
As part of its restructuring, Bakers Inn has also transferred the operations of several depots to external partners, who will now manage the supply of bread to those areas. This transition has further led to job losses among employees at the affected depots.
The company’s leadership hopes that these changes will help stabilize its financial performance and allow it to navigate the difficult economic conditions in Zimbabwe.