JTI Malaysia May Retrench 40pc of Workers

The downsizing will reportedly affect JTI Malaysia’s shared services operations.

KUALA LUMPUR, Sept 16 — Tobacco company JTI Malaysia is reportedly planning to lay off about 40 per cent of its workforce, or 170 staff, over the next two years.

StarBiz reported that the country’s second largest tobacco firm was expected to shutter its shared services operations during that period here and relocate it to another country.

“The market condition here has not been improving and profitability for the industry as a whole has halved since 2015 ever since the huge increase in excise duty.

“Retailers get margins from the industry but the industry can’t be supporting a bleeding situation,” a source told StarBiz.

JTI Malaysia managing director Cormac O’Rourke told StarBiz that the company has proposed changes to operations, including downsizing the workforce.

“As this process is ongoing, we are not yet in a position to comment on or confirm what the potential changes may be here, but will provide further clarity in due course,” he was quoted saying.

The tobacco industry in Malaysia reportedly struggles to sell seven billion sticks annually now, after previously selling 20 billion sticks a year.

JTI Malaysia said last month that illicit tobacco and vaping products, which are still unregulated here, were dominating the Malaysian market, as six out of 10 sticks are estimated to be illegal, while vaping accounts for another 10 per cent of the market.

“This development has led to a more than 30 per cent decline in the size of the overall legitimate industry,” O’Rourke told StarBiz.

“As a result of these challenges, a transformation of the operations in Malaysia is necessary to ensure overall business sustainability.”

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