HARBEL, Margibi – Firestone Liberia has announced a reduction of its workforce by approximately 500 employees or 7 percent of its regular workforce.

The layoffs are planned to be effected between August and October.

“These layoffs are the first such broad reductions since the 1980s,” the company said in a statement.

Firestone disclosed on Thursday that its decision is driven by ongoing significant and unsustainable losses it is experiencing over the last few years.

The company has blamed the low price of natural rubber, high overhead costs associated with a concession agreement between it and the government of Liberia, low production due to its inability to plant during the last 14-year civil war, and the uncertain business climate in the country for its continuous financial losses.

The company, however, said the decision to lay off the employees was a difficult one.

“Our employees are very important to us and making any change to our operations and employees is an incredibly difficult decision for our leadership team,” said Ed Garcia, Firestone Liberia’s president and managing director. “We remain committed to the country and people of Liberia, and our main priority is to ensure the long-term sustainability of our operation.”

Firestone said it would provide severance packages for employees who will be laid off.

It also promised to continue other measures to reduce spending including streamlining its business functions to reduce costs, improving operational efficiencies, and discontinuing tapping operations in old and low-producing areas of the concession

Firestone currently provides the highest private employment for Liberians, with more than 5,000 employees.

Since 2004, the company said it had infused more than US$1 billion into the Liberian economy through government taxes, salaries, and pensions among others.

It said it has also spent more than US$75 million on free education, housing, healthcare, and security for Liberians and families associated with its operations.

FAWUL President, Harris Kerkula. Photo: Gbatemah Senah

The president of the Firestone Agricultural Workers Union of Liberia, Harris Kerkula, said the management of Firestone had earlier informed him about its decision.

Kerkula described the situation as a sad day for the workforce of Firestone.

“The management called us to a meeting to inform us about the decision it is about to take,” he said. “According to them, they are experiencing too many losses and as a business entity, they cannot continue like this.”

He said the company informed the workers union that the amount of latex generated has decreased by 74 percent over the last five years.

“This huge cut in production is mainly because of the low production of latex in places of very old trees and relatively young rubber trees newly opened for tapping,” he disclosed. “These trees do not produce much latex like other grades.”

He said the ongoing crisis has also negatively affected the ongoing negotiation for a new collective bargaining agreement between the company and the workers union.

According to him, the last CBA ended December 31, 2015 and negotiations for a new one began on December 10, 2015.

Currently, Kerkula said the negotiation is at a standstill. One of the unresolved issues is a proposal for the company to substitute the Indian parboiled rice it supplies to workers for American parboiled rice at the rate of US$30 for two bags. Firestone has said it will make the change if workers are willing to pay US$38 instead.

Kerkula said additional requests made to the company include a call to reduce the workload of tappers and increase wages. “The company has also not agreed on these proposals,” he noted.

At this point in the negotiation, it is the government of Liberia that will make a decision.

Already, Kerkula said the Ministry of Labor had informed them of the depression in the extractives industry and inability of companies in the sector to make increment in salaries.

He, however, called on the government to quickly intervene in the interest of the workforce.

Featured photo by Flickr’s jbdodane