Top Ghanaian companies tumbling down due to ‘economic hard times’

Ghana’s economic downturn has forced many companies to lay off workers to cut down costs as consumers struggle with their finances and hence cut back on expenses.

The latest company to follow this trend is Trasacco Estates Development Company Limited, one of the top real estate companies in Ghana that provides the regional capital with luxurious homes.

The Italian construction firm last two months sacked more than 100 workers without pay, with the decision to pay them only 25 percent of their salaries.

This has not gone down well with the affected workers, who staged a massive demonstration at the company’s headquarters this week over the development. The demonstrators claimed that the company sacked them verbally without giving them their retrenchment packages.

Some claimed that they endured unfavourable working conditions during their years with the company while others said that they worked as contract workers for eight years without receiving full salaries, contrary to a stated probation period of 6 months, Ghanaian media Citi News reported.

But Trasacco has insisted that it did no wrong in asking the workers to go home as it is standard practice.

“Temporary workers were asked to go on vacation for two months. This is purely due to market conditions, economic conditions and scaling down our operations which is very prominent in any construction industry. It is not new; it happens in prime or major construction companies. If you don’t have revenue you don’t expect that workers come to work and get paid,” Trasacco’s Director of Finance and Administration, Deepak Kumar Das said.

Deepak Kumar Das added that the aggrieved workers are aware that they will be paid what is due them.

“Our position was that, salaries are paid on attendance and on deliverables. So, we thought that while you are at home, we pay you a percentage of your salary.”

“We are surprised about this event. We actually told them to be at home for two months. There were concerns on how we were going to compensate them. After negotiation, we agreed that the employees will get 25 percent of their basic salary in both October and November. This has been processed and they know about it that it will be paid in the last week of this month, and this has been amicably concluded”, he noted.

The real estate industry is not the only business having liquidity challenges as the same is being felt in the media, banking, telcos, and brewery sectors.

Over two thousand workers in different media organizations in the country have over the past few months been laid off and more are expected to be on their way home.

The massive layoffs came on the back of the collapse of seven indigenous banks in the country that sparked over 2,000 job cuts.

The media and telcos, including Vodafone Ghana, have also announced intentions of dismissing some of their workers, while the brewery sector has sent home 1,500 workers as a way of restructuring to save them from collapse.

This month, the Centre for Socioeconomic Studies (CSS) said over one million Ghanaians have lost their jobs since 2017.

“The CSS, from its study of the situation, found that over a million individuals who contributed significantly to Ghana’s workforce and also served as breadwinners in their families have had to suffer the misery of job loss,” the Centre said in a press release Monday.

The centre said the job cuts span the industrial, banking and mining sectors, as well as, the media and services sectors.

“The socioeconomic impact of these significant job losses on the general economy implies that well over three million livelihoods have been adversely affected given that one job loser can be said to have two dependants, though the empirics could mean worse,” the centre said.

“This also has serious implications for individuals or businesses that provide support services to sectors in which the job cuts are occurring. The overall effect is, aggregate demand is adversely affected, explaining the wave of hardship lamentations being expressed by individuals and businesses across the country. Government revenue performance targets cannot also be met on account of these facts,” it added.

Analysts have said that the only way to save the massive job losses which the country is experiencing is to industrialise, that is, revive ailing industries to create jobs.