Tag: job losses

By Admire Moyo for IT Web

JSE-listed technology services firm Altron is selling its building that housed subsidiary Altron Document Solutions in Isando, Johannesburg, and is retrenching employees from the business unit.

The company says the printing unit was negatively impacted by the COVID-19 pandemic, which resulted in a massive drop in the printing business.

Altron Document Solutions describes itself as “the world’s largest Xerox distributor and Africa’s leading technology and services company”.

It markets and services the complete range of Xerox document equipment, software solutions and services to 26 Sub-Saharan Africa countries.

However, the business was hit by the COVID-19 pandemic, leading the Altron Group to sell the Altron Document Solutions building.

“The demand for printing services has declined by about 45% due to COVID-19, and this, unfortunately, led us to retrench 73 people in Altron Document Solutions,” Zipporah Maubane, Altron spokesperson tells ITWeb.

“With fewer people in the Altron Document Solutions team, we now don’t require as much space, so we are selling the building and are looking for an appropriate space elsewhere for our colleagues in that business. We have owned the building for over 40 years,” she adds.

Since Mteto Nyati took over as CEO of Altron in 2017, it has been selling off some non-core businesses.

Nyati announced the company disposed of its last non-core asset Altech UEC, a set-top manufacturing business, to Skyblu Technologies, in January last year.

In its financial results for the year ended 21 February, Altron posted an increase in earnings before interest, taxes, depreciation and amortisation of 14% to R1.8 billion, while revenue increased 6% to R16.7 billion during the same period.

However, at the time, Nyati told ITWeb in an interview that COVID-19 was expected to have a negative impact on its business in the year ahead.

The company went on to introduce a raft of measures to save R500 million in costs in anticipation of a dip in revenue as a result of the coronavirus. Some of the measures included salary freezes and bonus cuts.

Altron’s move to sell its Isando building comes as it in May said it had set aside R300 million to complete its new Woodmead office campus announced last year.

Last year, Altron signed a rental contract with Growthpoint Properties for a 29 000-square metre head office in Woodmead.

Commenting on the Altron building sale, Derrick Chikanga, an analyst at Africa Analysis, says like other devices businesses, the printing business was negatively affected by the COVID-19 pandemic and the subsequent lockdown that was enforced by most countries.

He points out that most South African printers originate from European markets, while printer components are mostly manufactured in Asian markets.

“As such, the COVID-19 pandemic had an adverse impact on the entire global supply chain, thereby negatively impacting the local printing industry,” says Chikanga.

He points out that the work-from-home policy that was adopted by most companies since the onset of the pandemic has also hugely impacted demand for printers by large corporates.

“Most local distributors focus little attention on small office or home office devices, with their primary focus being on enterprise-grade printers. Hence, since most businesses are still enforcing remote work policies, demand for large format printers has been hugely affected.”

Nonetheless, Chikanga believes the industry will recover as businesses resume operations and some employees return to their offices.

“While the work-from-home policy might continue into the future, not all companies and employees are able work efficiently from home.

“Working from home also incurs additional costs to companies, such as Internet connectivity costs. Hence, while the industry might not recover to its original level, some restoration to production in the printing industry should be expected,” he concludes.

Unemployment in South Africa rose to 30.1% in the first quarter of 2020, according to Stats SA.

Since the beginning of the year, SA’s tech sector has seen a jobs bloodbath.

  • In January, telecommunications giant Telkom communicated it was retrenching as many as 3 000 employees
  • Retail giant Massmart closed down its electronics units – DionWired and Masscash – leaving 1 400 people without jobs
  • Systems integrator Dimension Data revealed that approximately 480 employees were to leave the business through a Section 189 process
  • Cell C announced it was to let go of as much as 40% of its semi-skilled labour force, as well as some senior managers and executives
  • SABC is also set to cut about 600 jobs

During the period, finance shed the most jobs (50 000), followed by community and social services (33 000), agriculture (21 000), transport (17 000), manufacturing (15 000), construction (7 000) and utilities (4 000).

Source: EWN

Tiger Brands employs more than 11 200 people in South Africa, excluding seasonal staff, a company spokesperson said.

South African food producer Tiger Brands said on Monday it is looking at “significant” job cuts and won’t pay an interim dividend as its business is hit by supply disruptions and margin pressures due to the impact of the coronavirus.

The owner of Jungle Oats and Tastic rice said first-half headline earnings fell 35% and it expects coronavirus-related costs of about R500-million ($28-million) to hit profit in the second half due to rand weakness, global supply chain disruptions and additional costs incurred during a lockdown in South Africa to curb the spread of the virus.

As a result the company has started looking at cost-cutting measures, including possibly “significant” job cuts, Chief executive Noel Doyle told reporters in a media call.

“Not just in headcount but right across our whole offering and of course we have to look at a couple of the categories where we have been incurring significant losses,” he said.

Tiger Brands employs more than 11,200 people in South Africa, excluding seasonal staff, a company spokesperson said.

Tiger Brands said it had decided not to declare an interim dividend in order to preserve cash, adding that it would re-consider an annual dividend at the end of the year depending on the group’s trading performance.

Headline earnings per share from continuing operations fell to 501 cents in the six months ended March 31, the company said, from 773 cents in the same period last year. Pretax profit from continuing operations fell 65% to R673 million.

“The group’s overall performance reflects the difficult trading environment and the challenges faced, particularly within grains, groceries, Value Added Meat Products (VAMP) and exports,” Tiger Brands said in a statement.

Group revenue from continuing operations increased by 2% to R15.7 billion. However, group operating income dropped by 29%, with operating profit margins declining to 7%, impacted by lower volumes, raw material and conversion costs rising ahead of inflation and increased marketing investment, it said.

“These costs, together with the effect of government regulations on pricing during the national disaster period, may have an impact in excess of R500-million on profitability (in the second half),” the company said.

By Lameez Omarjee for Fin24

The economy could contract by 10% and over 1-million people could join the ranks of the unemployed due to the impact of Covid-19, according to preliminary modelling by Business For South Africa (B4SA), an alliance founded four weeks ago in response to the pandemic.

The alliance of South Africa business bodies and organisations on Tuesday morning hosted a webcast where it gave details on its support for government’s efforts to combat the impact of Covid-19 on health, the economy and labour.

Speaking during the call, B4SA’s Martin Kingston shared more on the efforts of the economic intervention working group, which expects the SA economy to only recover in 2021.

A contraction of between 8% and 10% of GDP is expected in 2020, he said. Capital flows will also be restricted for the rest of 2020, he added. “[This] will fuel the number of people joining the ranks of the unemployed,” said Kingston.

So far B4SA expects over one million people to be jobless in the aftermath of the crisis. Government’s fiscal deficit is expected to balloon to 10% of GDP. According to the February 2020 national budget, Treasury expected the deficit to be 6.8% of GDP.

B4SA has also been in regular consultation with government, particularly the National Treasury, the SA Reserve Bank and the Presidency on plans to reinvigorate the economy post the crisis.

“[They are] highly receptive to our input and the stance business has taken to provide unconditional support to the national effort to combat Covid-19,” Kingston said. Kingston said he was hopeful that the “unprecedented level of cooperation” between the parties would be sustained, beyond the crisis.

B4SA is also working with government to determine how best to lift the lockdown restrictions, specifically in critical sectors of the economy.

“We are in dynamic discussion with government on the basis of which lockdown can be released; in whole or in part, regionally, sectorally or demographically or by age,” said Kingston.

There are a number of factors being considered – sectors are being assessed in terms of their contribution to GDP employment, level of exports, risk of transmission, among other things. Kingston added that any decision regarding the lockdown will not compromise the health of South Africans.

South Africa will have to restructure its economy in response to the impact of the pandemic, Kingston explained. The economic recovery anticipated in 2021 will require “significant fiscal stimulus,” he said.

In the interim, support must be provided to small and medium enterprises and larger companies who might face a liquidity crisis.

“We are in discussion with Treasury and the Reserve Bank on what structures are appropriate,” he said.

One such a financial support mechanism is available through the Unemployment Insurance Fund, which has made available a new benefit to employees during this time. The structure of the benefit was finalised last week through a process which involved discussions at National Economic Development and Labour Council (Nedlac), said B4SA’s Robert Legh.

When asked on B4SA’s views on an income or welfare grant for people to support their families, Legh said that the alliance was supportive of such a scheme and even tabled a proposal to Nedlac on this. “It is an affordability issue. The question is for Treasury to start answering on that one,” said Legh.

B4SA also pointed out that the Solidarity Fund established by government, and which already has raised R2.2 billion will also be used to support communities in distress.

Dominos goes bust in SA

By Kirsten Jacobs for Cape Town Etc

Employees at 55 Dominos Pizza locations across South Africa will be left jobless as the pizza joint closes its doors in the country.

Taste Holdings, owner of Starbucks and Dominos, has announced plans to liquidate its food businesses in the country with immediate effect. This decision comes after they failed to find a buyer for the Dominos licence in South Africa amid the country’s second recession in two years.

In November 2019, Taste Holdings sold Starbucks to Rand Capital Coffee, and also found buyers for other brands Maxi’s and The Fish & Chips Co. However, failure to find a buyer for Dominoes has led them to the decision to voluntarily liquidate.

“Domino’s Pizza LLC [the US franchise company] provided financial support and assistance during this period. Unfortunately, a deal could not be concluded on terms acceptable to all parties and further financial support was not provided by DP. As a result, it was decided to place the respective entities into voluntary liquidation,” the company explained in a statement.

Fifty-five Taste Holdings corporate stores will close with immediate effect, affecting 770 employees. The 16 franchised outlets will continue trading with management providing advice and assistance where possible. There is currently no date mentioned regarding when the franchising licence will be terminated.

Over 9 000 jobs to be cut in SA

The first two months of the new year have seen a number of South African companies give notice to retrench workers – a move which will result in more than 9 000 people losing their jobs.

Below are some of the companies who are looking to downsize their workforce:

Telkom

  • Telkom informed trade unions and staff that it could cut up to 3 000 of its more than 15 000 employees
  • The company is struggling with declining performance in the face of competition
  • The Federation of Unions of South Africa (FEDUSA) has highlighted that overall job cuts at Telkom in 2020 could be around 6 000 jobs

Samancor 

  • Mining company Samancor Chrome said it could cut close to 2 500 jobs in response to weak chrome prices and power supply problems
  • The job cuts would apply to its Eastern and Western Chrome mines
  • It cited Eskom’s power supply problems and increased electricity tariffs as reasons for the jobs cut

Dion Wired/Massmart 

  • Massmart plans to shutter the 23-store Dion-Wired chain of hi-tech appliance shops and 11 Masscash wholesale outlets
  • This will affect 1 440 employees of 12 000
  • Massmart is suffering from an earnings slump due to declining consumer traffic in malls and low consumer confidence, which has affected sales of high price-ticket electronic items

Sibanye-Stillwater

  • The mine has reportedly retrenched 1 142 employees, well below the initial anticipated retrenchment figure of 5 270 jobs
  • The mining company employs 88 000 people across South Africa
  • The retrenchments follow the Section 189 restructuring at its Marikana operation, which has suffered losses since the shooting in 2012

Glencore

  • Glencore issued section 189 notices to 665 employees
  • The retrenchments centre around the mine’s Rustenburg Smelter
  • The group has cited the high cost of electricity and an increase in the carbon tax and logistics costs as reasons for downsizing

Aspen

  • Aspen Pharmacare said it plans to cut up to 219 jobs at its Port Elizabeth and East London plants
  • The drugmaker is disposing of non-core assets to manage its debt burden as it seeks to remain globally competitive

The South African Society of Bank Officials (Sasbo) has vowed to shut down all digital banking platforms on Friday, according to an article published by ITWeb.

South Africa’s largest financial union has threatened the country with a complete blackout of transactional services, including cash withdrawals, in response to the increase in digitalisation and job losses in the sector.

South African banks have been advising their customers to use online banking platforms on Friday.

However, Sasbo general secretary Joe Kokela told ITWeb in an interview: “Whatever the banks say, it’s their right; I can only speak on behalf of Sasbo and say the digital platforms will be affected. Those services are all controlled by human beings to be able to perform a function. Our argument is that these services will be affected on Friday.”

Sasbo hopes the single day of industrial action will mitigate the retrenchments that have become common in the sector.

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.

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