Tag: jobs

By Luyolo Mkentane for Business Day

The unemployment rate rose to a near 15-year high in the first quarter of 2019, highlighting the enormity of President Cyril Ramaphosa’s plans to recover the country’s economy.

Ramaphosa said he wants to lead the country out of “nine wasted years”, a tacit reference to his predecessor Jacob Zuma’s term in office, which was marked by increasingly brazen corruption and state capture. Under Zuma’s watch unemployment soared and economic growth faltered, while confidence in the SA economy fell to new lows.

Statistics SA’s quarterly labour force survey revealed on Tuesday that the unemployment rate jumped 0.5 percentage points to 27.6% in the first quarter of 2019.

According to Trading Economics, the unemployment rate averaged 25.66% from 2000 until 2019, reaching a high of 31.20% in the first quarter of 2003 and a record low of 21.50% in the fourth quarter of 2008.

The economy lost 237,000 jobs during the first quarter of 2019. Leading that was the construction sector, which shed 142,000 jobs.

Due to subdued activity in the sector, construction and engineering company Group Five is intending to sell the only profitable assets it owns to help it survive, while Basil Read is in business rescue.

The finance sector trailed behind with 94,000 job losses, community and social services 50,000, and private households 31,000.

The mining sector, one of the pillars of the SA economy, shed 20,000 jobs and agriculture 12,000. Employment gains were recorded in the transport industry with 59,000 jobs, trade 25,000, utilities 16,000 and manufacturing 14,000.

Nedbank chief economist Dennis Dykes said Ramaphosa faced an enormous task in reversing the unemployment rate. “It is extremely unusual and it must be difficult for him because he was left this terrible legacy by the previous administration.”

The country needed economic growth that was labour absorbing, Dykes said, adding that Ramaphosa should create a conducive business environment to allow captains of industry to grow the embattled economy, which grew 0.8% in 2018.

Econometrix chief economist Azar Jammine said Ramaphosa needed to tackle policies that had led to unemployment, such as improving the education system and labour laws, to make them more attractive for business.

He singled out the national minimum wage, which came into effect in January, saying it could be argued that it is one of the factors that contributed to the spike in unemployment.

“The point is, are people going to support him in trying to fix the problems? Cosatu is one of his biggest supporters but it will oppose any amendment of the labour laws,” said Jammine.

Stellenbosch University political analyst professor Amanda Gouws said the rise in unemployment presented Ramaphosa with the opportunity to strengthen his hand and get rid of deadwood and corrupt ministers in his new cabinet.

“He has promised to improve the economy and clean up the rot in government. He has the ability to do that. Those numbers show this is the legacy Zuma left us,” said Gouws.

Ramaphosa appointed investment envoys in 2018 in his quest to raise $100bn in new investments over the next five years.

Nelson Mandela University political analyst Ongama Mtimka said infrastructure investment could help stimulate greater economic growth and help address what he described as SA’s long-term unemployment problem.

“We know there are underlying structural problems in SA that are long term and what makes matters worse is the fact that it’s mostly young people that are unemployed,” he said.

Cosatu spokesperson Sizwe Pamla said Ramaphosa had at most two years to convince the electorate that he had a plan to arrest spiralling unemployment. The 0.5 percentage point increase in unemployment was a wake-up call to the president and his incoming administration, he said.

“It speaks directly to the enormity of challenges awaiting them.”

Source: IOL

Embattled Tiso Blackstar has announced that it intends to close its Sunday World tabloid as revenue plummets and workers continue to strike.

Managing director Andy Gill yesterday sent out an internal communication to staff informing them that Sunday World employees had been notified about the company’s intentions.

Tiso Blackstar owns the Sunday Times, Financial Mail, Sowetan and Business Day, among other titles.

The company also shut down the print edition of The Times in 2017.

Gill said the company was “proposing a broad restructuring of its editorial operations as a result of the economic headwinds facing the business”.

He blamed looming job cuts and possible closure of the Sunday World on poor revenue.

Tiso Blackstar has also issued Section 189a notices to the editorial staff of the Sowetan, Daily Dispatch and The Herald, and editorial production staff in the business media stream.

“We are aware that the current situation is difficult, especially for those affected by restructuring, but it is important to consider the alternative future if we do not act now – one in which further title closures and widespread job losses become inevitable,” Gill said.

SA National Editors’ Forum chairperson Mahlatse Mahlase expressed concern over the looming job losses.

“The retrenchments come at a time when the industry has been shedding jobs at an alarming rate, which is very concerning.

“Newsrooms are becoming smaller, and that will always have an impact on the quality of journalism and diversity in the media,” she said.

The announcement comes at a time when some employees were on a strike which started last week after negotiations over pay, lack of bonuses and working conditions for journalists collapsed.

Yesterday, the employees picketed outside the group’s offices at The Hill on Empire Road in Johannesburg.

3M to cut 2 000 jobs

By Nathaniel Meyersohn for CNN

3M, which makes Post-It notes and Scotch tape, is cutting 2 000 jobs around the world.

The industrial manufacturer made the announcement Thursday as it reported weak sales during its most recent quarter and darkened its outlook for the year ahead.

Sales slid 5% to $7.9 billion last quarter compared to the same time period a year ago. Although sales ticked up in the United States, 3M’s largest region, sales dropped more than 9% in Europe, the Middle East and Africa. Those areas make up 3M’s second largest region. Sales in Asia also fell more than 7% compared to a year ago.

“The first quarter was a disappointing start to the year for 3M,” said Mike Roman, 3M chief executive officer, in a statement. “We continued to face slowing conditions in key end markets.”

In addition, 3M slashed its full-year guidance.

3M said the job cuts, which represent around 2% of its global workforce, will save the company up to $250 million annually. 3M will spread out the cuts across different business divisions and geographies “with emphasis on corporate structure and underperforming areas.”

The stock sank more than 10% in early trading Thursday, which drove down the Dow.

E-commerce could create 3m jobs in Africa

Source: Fin24

Online marketplaces establishing themselves across Africa could create around 3-million new jobs by 2025.

These digital platforms, which match buyers and providers of goods and services, could also raise incomes and boost inclusive economic growth with minimal disruption to existing businesses and workforce norms.

These are among the findings of a new report, How Online Marketplaces Can Power Employment in Africa, released by Boston Consulting Group (BCG).

Generating employment is an urgent priority across the continent. The African Development Bank estimates that one-third of the 420 million Africans aged 15 through 35 were unemployed as of 2015.

Around 58% of the new jobs—created directly, indirectly, and through the additional economic activity generated by online marketplaces—will be in the consumer goods sector, 18% will be in mobility services, and 9% in the travel and hospitality sector, according to the report.

For online marketplaces to reach their full potential, however, the public and private sectors must work together to build the right digital environment from the outset, the report notes.

Obstacles to industry expansion include underdeveloped infrastructure, a lack of regulatory clarity and limited market access.

The economic and social benefits of online marketplaces

“Online marketplaces are a good illustration of how the digital revolution can create economic opportunity and improve social welfare in Africa,” says Jan Gildemeister, BCG partner and managing director based in Johannesburg.

“Because Africa currently lacks an efficient distribution infrastructure, online marketplaces could create millions of jobs.”

Concerns that growth in online marketplaces will merely cannibalise the sales of brick-and-mortar retailers are misplaced in the case of Africa, according to the report.

There were only 15 stores per one million inhabitants in Africa in 2018, compared with 568 per million in Europe and 930 in the US. This extremely low penetration suggests that there’s minimal risk that e-commerce will displace existing retailers and that much of the population is underserved.

The report also details the ways in which economic activity generated by online marketplaces boosts employment and incomes.

These businesses create demand for personnel in new fields, such as platform development, as well as for merchants, marketers, craftspeople, drivers, logistics clerks, and hospitality staff.

Some also offer skills-development programs and help small enterprises raise capital to expand their businesses.

Online marketplaces also boost demand for goods and services in areas currently beyond the reach of conventional retail networks and bring new people—such as women and youth who may be currently excluded from labour markets—into the workforce.

The report recommends that the online marketplace community and African governments collaborate to address the challenges that hinder the online marketplaces’ ability to grow.

140 000 jobs at risk as Edcon flounders

Source: Business Live

A few weeks ago, the FM reported that Edcon, an iconic SA retail brand that began life in 1929, was facing an imminent cash crunch. This weekend, news emerged that Edcon had written to its landlords, asking for a two-year “rent holiday” of 41% for all its 1 350 stores.

The reality may be less dramatic than the “Edcon crashes” headlines suggested, partly because its stores are still open and trading. But there’s no denying that these are dire times for SA’s largest clothing retailer.

That’s not surprising. Last month, CEO Grant Pattison admitted to the FM that new funding was needed. “The current process we’re under is looking for shareholders, new and old, to inject new capital into the business,” he said.

Now, a letter dated December 11 and sent to Edcon’s landlords spells out details of how this new “restructuring plan” will work.

What is apparently on the table is that the retailer’s existing funders would convert R9bn of their debt into equity, while injecting another R700m. Then, the Public Investment Corp will inject another R1.2bn into Edcon.

For this to happen, the lenders have stipulated that Edcon’s 31 key landlords (like Hyprop and Growthpoint) must agree to the two-year “rent holiday”. This would equate to R1.2bn worth of support, for which Edcon plans to give the landlords a 5% stake.

It’s a tough call for the landlords, especially since Edcon plans to shut a number of stores until 2022. But if they reject this deal, Edcon could end up defaulting on leases anyway.

The bigger issue is whether bailing out Edcon will create a stronger retailer able to compete, or whether it will be akin to an SAA bailout — where the money vanishes up a chimney, with no value created. It’s a tough call, since Edcon has been shrinking every year. Since 2012, it has lost 22% of its clothing and footwear market share; it once held more than 50% of the sector.

Disturbingly, there aren’t too many specifics on the turnaround plan. There are promises to close some stores and improve trading densities (sales per metre), get more stock through its tills, expand its financial services side (credit and insurance, primarily) and reduce IT costs.

There’s nothing ingenious in that, though. And it’s one thing to put those goals on a PowerPoint presentation, another to make it happen.

Still, the letter to landlords contains some interesting revelations.

First, it says that since March, advisory firm Rothschild & Co has been trying to sell Edcon, but has found no takers. It adds that unless there is a further “intervention”, liquidation is “highly likely”. Fortunately, Pattison seems to have a plan, likely to be announced in the next few days, to prevent that. Which is just as well, considering the 40,000 employees who would be affected.

Of course, Pattison hasn’t helped himself by repeatedly bungling the communications around Edcon.

He denounces the reports as “misleading”, without saying exactly what was wrong. At the same time, he admits that when asked to comment by the Sunday Times, he declined.

There has been a consistent pattern of refusing to comment, then blaming the media for publishing what happened, when greater introspection might have been the wiser approach.

Unfortunately, it goes hand in hand with Edcon’s years of displaying a profound lack of respect for customers and, it seems, staff.

Hopefully, a much stronger Edcon will emerge from the ashes, one that can restore the principles and market position it once held, selling things that people actually want to buy.

Job cuts loom at DStv

By Chris Forrester for Advanced Television

According to a report in South Africa’s Sunday Times newspaper, pay-TV operator DStv is laying off up to 200 staffers in a move to save cash amidst increased competition.

A DStv spokesperson said the move was in order to create a leaner and more agile business. Existing staff are being asked to reapply for their jobs, says the newspaper.

DStv’s parent, MultiChoice has lost some 41,000 Premium top-tier subscribers in the year to March 31st.

MultiChoice has made no secret of its annoyance that rivals such as Netflix and Amazon Prime are eating away at its core subscribers and yet operate without having to fulfil the licensing obligations faced by MultiChoice.

MultiChoice CEO Calvo Mawela has called for a change in regulations to cover the new OTT entrants.

By Tehillah Niselow for Fin24

The official unemployment rate increased by 0.5% to 27.2% in the second quarter of 2018, up from 26.7% in the first three months of the year.

Statistician-General Risenga Maluleke released the Quarterly Labour Force Survey for April, May and June in Pretoria on Tuesday.

The increase in the unemployment rate was due to a decline of 90 000 people in employment, as well as an increase of 102 000 people who became unemployed. Additionally, the number of discouraged job seekers rose to 2.9 million people, between the first and second quarters of 2018.

Manufacturing has lost 55 000 jobs year-on-year, and Maluleke said that basic metals and food production were the main drivers of the employment losses in the sector.

The industry hardest hit by job losses was manufacturing, with 105 000 people becoming unemployed in that sector in the second quarter. Community, social and services recorded a 93 000 jobs contraction, and 57 000 employment positions were cut in trade.

The transport sector accounted for the largest increase in jobs, with 54 000 new positions in the second quarter, while mining added 38 000, private households 22 000 and utilities increased by 18 000.

Of the 20.2 million South Africans aged 15 to 34 years, the number of young people not in employment, education and training (NEET) increased by 0.4% in the second quarter year-on-year.

This rate increased for black African males and white males. The female rates of NEET was recorded at over 40% among black African females aged 15 to 34 years old.

“Black women are the most vulnerable when it comes to unemployment,” Maluleke said.

HP to cut 5 000 jobs in restructure

By Dion Weisler for CNBC 

HP now expects 4 500 to 5 000 employees to leave the company by the end of fiscal 2019 as part of an ongoing restructuring plan, the PC maker said on Tuesday.

In October 2016, HP’s board had approved a restructuring plan to be implemented through fiscal year 2019, under which it had expected around 4,000 job cuts. In May, the company said it expected that number to increase by 1 to 2 percent.

The company employed 49,000 people as of October 31.

HP, formed in 2015 when the then Hewlett-Packard Co was spilt into two, said in a regulatory filing. It now expects pretax charges of about $700 million related to the layoffs, compared with about $500 million forecast earlier.

HP estimates that about half of the expected pretax costs will relate to severance and the remaining costs due to infrastructure, non-labor actions, and other charges.

When Hewlett-Packard Co split up, HP Inc focused on the consumer-facing hardware business, including sales of PCs and printers, while Hewlett Packard Enterprise co-hosted the company’s data-center, software and services units.

HP, which has the top position in worldwide PC shipments in the first calendar quarter of 2018 with a 22.6 percent market share, reported better-than-expected quarterly sales of $14 billion in the quarter ended April 30.

Game headquarters could move to Jo’burg

Source: Supermarket & Retailer 

Durban could lose the headquarters of general merchandise retailer Game to Johannesburg, a move that could affect hundreds of staff members in the region.

Massmart Holdings Limited spokesperson Annaleigh Vallie confirmed that the move was eminent with Game management currently holding discussions with staff based at the retailer’s head office in Durban.

“It is, however, important to note that no decision on the move has been finalised,” said Vallie.

Massmart owns the South African local brands such as Game, Makro, Builder’s Warehouse, CBW and many others. It has four divisions, which are Massdiscounters to which Game falls, Masswarehouse, Massbuild and Masscash.

Walmart purchased a majority of shares in Massmart in 2011.

“The discussions are at a very early stage and currently involve consulting with approximately 330 potentially affected staff in order to ensure their input into the decision making process. From a legal perspective discussions of this nature typically take place within the framework of Section 189 of the Labour Relations Act.”

Vallie said currently no retrenchments were taking place in the region.

The company was of the view that if the potential move would take place, Game would benefit from being geographically closer to suppliers, Massmart and other group operating divisions.

Vallie said: “This in turn has potential to enhance commercial decision making and, group-wide collaboration and leverage.”

South African Commercial, Catering and Allied Workers Union (Saccawu) Kwa-Zulu Natal regional secretary Mathews Ndlovu said on Monday that the union was not surprised by the move. “Our objective is to try and make sure that there is no jobs lost in the process. We cannot stop the company from re-locating as part of their business restructuring,” said Ndlovu.

He said that if the staff members agreed to go to Johannesburg, they should receive relocation allowances and fees. “These things are on the table and have not been completed yet. As for those who are not willing to relocate must be accommodated in the perimeters of the province with same benefits which are not less favourable to what they are currently getting.”

Original article by Given Majola for IOL

Job cuts loom at Ricoh

Ricoh plans to cut about 4,000 jobs as early as fiscal year 2019 to streamline its struggling, core office-equipment business, the Nikkei reported on Thursday.

The company will let go off 3 000 employees through a sale of a logistics unit in Japan and trim management positions in Europe — reducing its global workforce by 4 percent, the Japanese daily said.

Ricoh and legacy companies that supply office printing equipment such as Xerox Corp have been looking to sell assets and focus on other areas of growth as paper printing increasingly gives way to digital alternatives.

Earlier this year, Japan’s Fujifilm Holdings said it would buy Xerox in a $6.1 billion deal to gain scale and cut costs. That proposal has, however, hit road blocks as two of Xerox’s top shareholders — Carl Icahn and Darwin Deason — opposed the deal.

Ricoh, meanwhile, has already cut over 5,000 jobs in North America since beginning of this year, the Nikkei said.

The 59-year old company has reported declining profits for the past four years. Its stock has shed nearly two-thirds of its market value since its peak in 2007.

Ricoh did not immediately respond to a request for comment outside regular business hours.

The Nikkei said last month that Ricoh was conducting impairment tests on its slumping North American business, and may have to take a related charge of about 100 billion yen ($943.04 million).

The company will sell a copier factory in the Chinese industrial hub Shenzhen and is planning to dispose of its equity stake in a Coca-Cola distributor for about 56 billion yen ($528.50 million), the Japanese business daily reported on Thursday.

Expenses related to the job cuts and other restructuring efforts are expected to weigh on the company’s fiscal 2018 performance, the Nikkei reported.

Ricoh will also set aside 200-billion yen for acquisitions of commercial and industrial printing companies as it looks to move away from office printing, according to the report.

Source: Japan Today

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