South African companies have announced plans to cut more than 10 000 jobs less than three months into 2020 as faltering economic growth adds strain in a country where a third of the workforce is unemployed.
Electronics company Ellies Holdings Ltd. is the latest to start the process of reducing its headcount due to ongoing financial losses.
Jobs are also at risk at companies including Telkom SA SOC Ltd., the country’s largest fixed-line operator, and Walmart Inc.’s local unit, Massmart Holdings Ltd., after slumps in earnings.
If realised, these job losses will add to an unemployment rate that is at the highest in at least 11 years, and place a further dampener on an economy stuck in the longest downward cycle since World War II.
Annualised gross domestic product data to be released Tuesday will probably show South Africa fell into a second recession in consecutive years after state power utility Eskom Holdings SOC Ltd. implemented the deepest electricity cuts yet in December. The economy likely contracted by 0.2% in the final three months of 2019, according to the median estimate of economists in a Bloomberg survey.
That may have dragged down economic growth for the full year to the slowest in a decade.