The Nigerian Exchange Group (NGX) conducted a significant downsizing shortly after its annual general meeting in Lagos, officially terminating 25 employees, contrary to earlier reports of 40. Affected positions include regulatory officers, compliance managers, and high-level executives such as the chief financial officer.
The restructuring, influenced by a PricewaterhouseCoopers (PwC) audit, was implemented by Group Managing Director/CEO Mr. Temi Popoola, following recommendations to reduce operating costs and align staff roles with organizational needs.
Despite a sharp increase in profits, reported at N5.2 billion in 2023, primarily from its holdings in CSCS Plc, the downsizing has been met with demands for reinstatement and financial compensation from affected staff, who claim the layoffs lacked transparency and clear criteria.
The Nigerian Exchange Group (NGX) has relieved some staff members of their jobs days after its annual general meeting (AGM) which was held in Lagos.
Multiple sources told Nairametrics that over 40 staff members of NGX Group were affected, with top shots in the organization asked to go.
However, sources at the NGX informed Nairametrics that the official figures were 25 full-time employees.
Staff affected
The affected staff members, according to sources, include regulatory officers, compliance managers, audit managers, the investment team, the chief finance officer, and the general counsel of NGX, among others.
The overhaul was led by PricewaterhouseCoopers (PwC), a multinational professional services firm, Nairametrics understands.
The PwC carried out a staff audit and made recommendations to Group Managing Director/Chief Executive Officer of Nigerian Exchange Group, Mr Temi Popoola, who implemented the downsizing, a source said.
“Mr Popoola knew that he was in a position to be the next Group CEO when Oscar Onyema (former NGX Group CEO) left. So, as soon as he assumed office, he contracted PwC to overhaul NGX Group,” an affected senior staff member told Nairametrics.
“However, several times, PwC asked about job responsibilities from the Human Resources (HR) Department. In preparation for the AGM, as Holdco managers, we were in charge of organizing the AGM and we did a lot of leg work to ensure that we got enough proxy shareholders so as to secure enough percentage required to rectify Popoola as GMD.”
The ex-staffer said after the AGM, same day around 5 pm, a virtual meeting was held with all staff members of the group, where the Group Managing Director said that he had got feedback from PwC and that he was going to scrap offices and allow staff members that were no longer relevant to the organization to go.
Mr Popoola noted that he was going to send termination letters to affected staff the same day and have their emails blocked for access, the ex-staff member said.
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“He didn’t give the affected people the opportunity to ask questions. He said consultants did a transparent job but he did not show the results of the review to anybody,” another affected ex-staff member said.
“We didn’t know the criteria that were used to come to the conclusion of the sacks. That aside, we have a high staff attrition rate, not to forget that the payout to the board level is extremely high.”
Another affected staff member said the decision of the NGX to downsize was greeted with pessimism, noting that there were no clear criteria for the dismissal.
Currently, the affected staff members are demanding reinstatement, emphasizing their contributions and lack of justification for their terminations.
Some are seeking financial compensation, while others are advocating for reinstatement.
The NGX Group did not comment officially on the downsizing.
NGX Headcount
Official information contained in the company’s financial statement reveals that NGX Group (the parent company of the NGX Exchange Ltd) has about 132 staff members, down from 139 a year earlier.
At the Group level, the total headcount is about 23 versus 21 same period a year earlier.
However total salaries and defined benefits for 2023 were N3.1 billion (N3.14 billion in 2022) which represents around 37.8% of Group revenues, slightly above NGX’s wide average of 30% per Nairametrics research.
The Group with just 23 employees also has an annual salary and defined benefits of N911.4 million up from N5111.8 million a year earlier, a whopping 78.2% increase year on year.
Also included in the salaries is N607.3 million for board members, with executive compensation accounting for N388.4 million. Sitting allowance alone gulped N72 million.
Executive compensation relates to compensation paid to Chief Executive Officer and Executive Directors other than Board members, according to company filings.
“No big deal”
Downsizing is not new as it is common in several organizations. Recruitment experts say downsizing is sometimes necessitated by economic downturns, lack of productivity, and redundancies, among others.
“Downsizing is not always a big deal,” said a recruitment expert, Dan Agim.
“It is forced upon organizations when there is low productivity or over-recruitment. Sometimes, it is caused by economic downturns, but that is mainly for corporates.
“At times, it is driven by disloyalty for a new sheriff in town or when a new CEO feels that those around are loyal to the previous CEO. It may also be caused by the perception of imbalance, such as when it is perceived that the majority of people in the organization are from one religious, ethnic, or religious group,” he said.
Sources with knowledge of the matter also opine that the move was informed by directors of the NGX who lamented the high operating costs at NGX, demanding the implementation of recommendations for corporate restructuring.
According to one source, roles that were previously designated for Senior Managers were downgraded to manager roles to align with role expectations.
Other sources suggest that consultants also recommended a Group structure for the NGX, which bloated the workforce and overhead. “The same consultants are now the ones asking for a downsizing,” the source opined.
The NGX Group reported a profit after tax of N5.2 billion in 2023, a ninefold increase from the N591.5 million posted a year earlier. Most of the profits came from its crown jewel, CSCS Plc. The NGX owns 44% of the company.
Update: This article has been revised to reflect new information. Contrary to the earlier report of 40 staff members being dismissed, sources at NGX have confirmed the actual number is 25.
