Sometime in September 2020, it was in the news that Cars45 laid off its management team, and replaced them with a new one. Aside from the public notice released online by the company, which was later deleted, but some people managed to save it, there was little or nothing in the public domain to show how the lay-off affected Cars45’s immediate workforce.
Last week, it was reported that Jiji has acquired Cars45. There was little or nothing in the public domain to show how the acquisition affects or would affect Cars45’s immediate workforce. The new management took over, and everything has continued as if nothing has happened.
In the lay -off the management team, were some other staff laid off? If not, what impact did the sacking have on the workforce? What was the staff’s morale? Was there an exodus of staff? What was the extent of these impacts on employment in Nigeria? Now, with the acquisition by Jiji, what impact is this going to have on the workforce of Cars45 and then Jiji? Is Jiji going to retain all the staff of Cars45 or some of them would be laid off? Was there an exodus of staff due to this acquisition? What would be the impact of the acquisition on employment in Nigeria?
These are critical questions that should be asked by any Labour and employment subject matter conscious person amongst all other concerns that may require some special and professional focus like corporate governance, directorship, shares acquisition, corporate culture, brand loyalty, marketing, and online car sales mall, and customer satisfaction by experts in these areas.
There may be no clear answers to some of these questions now. Likewise, it is typical in Nigeria, for there to be little or no answer, or data too to support all the answers to these questions now and in future. However, these questions are worthy of consideration. The sacking and subsequent acquisition are also deserving of study. An innovative company, being acquired by another innovative company in a different business area but the same sector, technology, is something that should spark some critical discussion
It could be argued that the sacking of the management team in September 2020 only affected them, not the other cadres of staff. That action was to save the investors’ funds and other corporate governance issues. In the same manner, the acquisition by Jiji could be argued would not affect the staff in anyway. That the action is to reposition the company or leverage on the strength of both companies to gain market share. Well, that argument should be reconsidered critically.
The importance of management on the workforce cannot be over emphasised. Nowhere in the world has the sacking of management of a company, or the acquisition of a company, no matter how organised the corporate structure, did not have a direct or indirect positive or negative impacts on the workforce of the organisation. Of course, by extension on the economy. This is dependent on the size of the organisation and the significance of the sector its plays in.
Sometimes in 2012, a bank in Nigeria acquired another back. The Pension subsidiary of the said acquiring bank also acquired an insurance company. In 2014, 2016, and 2020 the beverages industry and oil sector recorded some well-publicised acquisitions.
What followed was the disposal of some assets and liabilities of the acquired companies. Employees were laid off too. There was also an exodus of staff due to issues with new management staff, corporate culture, lack of trust in new management and others. While the value and numbers of reported acquisitions could be obtained from some authorities like the Securities and Exchange Commission and Corporate Affairs Commission, the companies were required to file some relevant details with the commissions. Some analysts and newspapers also shunned out near to acquire data on the value and numbers of acquisitions involved.
However, there is little or nothing in the public domain on the impacts on the immediate workforce of the companies and on employment in Nigeria. It is details and data like these expressed above that ought to be available to the public voluntarily but hardly voluntarily released to the public in the announcement of such acquisition. It is usually left to speculations in the public.
That said, whether there are details of the impacts of the acquisition of Cars45 by Jiji in the public domain or not, there is no doubt that there would always be impacts, positive or negative, The magnitude of the impacts may also not be known now, but the speculations that would follow may downplay or exaggerate it.
It may be hard for companies to voluntarily disclose the effects of any business decisions like the transfer of ownership to the public. It is understandable that releasing the details mostly on the value and number of acquisitions to Securities and Exchange Commission, and Corporate Affairs Commission is due to statutes and regulations. The companies are under compulsion to comply or face sanctions. However, making such voluntary disclosure might give a level of trust and perception of transparency in the process
In the case of employment in Nigeria, the governments, Ministry of Labour and Productivity, and other stakeholders should consider having statutory provisions and regulations compelling companies to file and disclose how actions similar to that of Cars45 and Jiji would affect the immediate workforce of the acquired and acquiring company. In addition, employment in Nigeria in terms of the number of staff, salary, and others.
Having such information would allow for easy study and understanding of the impact of such actions on the company’s workforce and employment in the country generally. It would also help to build and create access to near to accurate data and information on the impacts of a company’s actions on immediate workforce, its primary environment and the Nigerian economy generally. This data can serve as a source of information that government can rely on for employment and labour plans, laws and policies.
Sadly, these events by these two companies are play cards for others to adopt. It is hoped that these events prove to have positive than negative impacts on employment in Nigeria. The rate at which innovative companies are springing up, expanding, and growing due to rapid technology advancement in Nigeria, the accurate impacts in terms of employment generation may not be readily ascertained. Likewise its contributions to unemployment in Nigerian would be very difficult to gauge.
Adekola is a Legal Practitioner and Head, Probate Services, Greenwich Registrars and Data Solutions Limited. You can reach him on 08165299774 and 08150373535.