Tag: jobs

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).

Jobs bloodbath at SABC

According to Sunday World, The SABC has revived plans to retrench workers – despite the uproar that flared up when the public broadcaster initially wanted to cut hundreds of jobs as part of a turnaround process.

  • It will reduce the cash-strapped organisation’s salary bill by R700-million
  • It plans to invoke section 189 of the Labour Relations Act to cut 33% of staff
  • This means retrenchment of 981 permanent staff members and more than 1 200 freelancers
  • The current SABC operating model is not defined and had major challenges, such as the absence of an overarching group strategy and planning function cascading to divisional plans

Ellies announces job cuts

Source: MyBroadband

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.

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

IT workers suffer as SA bleeds jobs

Source: BizNews

Many South African technology and telecommunications companies are firing workers, and this is set to continue in the coming year.

This is the view of labour consultant Tony Healy, who told Business Day TV that job losses are a consequence of many years of low economic growth and increased digitisation.

On 13 January, Massmart announced it was planning to shut down its 23 Dion Wired stores which will affect over 1,000 employees.

Only days later Telkom said it was planning to cut 3,000 jobs this year because of the tough economy, the move to mobile data, and inefficiencies at the company.

This, however, is only the tip of the iceberg. Many other tech companies have already shut their doors or are cutting staff.

In the last two weeks news broke that ICT service provider ATIO is set to be liquidated and that Yekani Manufacturing’s R1bn electronics factory in East London may shut its doors.

These job cuts, Healy said, are not surprising when one considers there was very little economic growth over the last few years.

“Without economic growth, one just can’t create the jobs that we need to stave off job cuts,” he said.

Dennis Dykes, chief economist at Nedbank, said what we are seeing is capitulation – with companies realising the much-needed economic growth will not come.

“Companies have done the cost cutting and trimmed their budgets to keep expenses under control in the hope that we will now start to see an uplift in the economy,” he said.

“They are now basically thinking it is not going to happen and are therefore turning to more serious interventions, including job cuts, to survive.”

Bad outlook for 2020
Bad news for employees is that South Africa’s dismal economy growth means companies do not have the funds to train employees for other positions.

Healy said while the government is trying to intervene to prevent job losses, there is not much companies can do as they have to balance their books.

Further bad news is that South Africa’s projected economic growth of 0.9% in 2020 is not close to what is needed to turn the situation around.

“We need growth levels above 5% before we can begin to realistically say that we are growing fast enough to reverse the job losses we are seeing now,” said Dykes.

Dykes highlighted that unemployment in South Africa is currently at worse levels than what countries experienced during the Great Depression.

He said unemployment is sitting at 29%, but if one includes discouraged workers it is closer to 37%.

“This is horrendous,” he said.

Good news for IT professionals
Good news for IT professionals is that while jobs are lost, there are several areas where there is strong demand.

Healy said jobs which are required in the fourth and fifth industrial revolutions are very different from the skills which are currently required.

He said local companies are not up-skilling enough people to fill the kinds of positions which are being created, though.

While people with more traditional skills are losing their jobs, those who have skills suited to the digital world are in demand.

Telkom plans to cut 3 000 jobs

By Sibongile Khumalo for Fin24

Telkom has issued a notice to cut as many as 3 000 jobs – nearly a third of its workforce – across multiple departments, as the company looks to streamline its operations amid falling earnings and changing market conditions.

Trade union Solidarity, which is one of the unions representing workers, said a notice of the process – which would be conducted in two phases – was received on Wednesday.

“We expected the retrenchments to happens but not in such large numbers. This is quite a large number… we did not expect it,” said Linda Senekal, the union’s sector coordinator.

She said affected workers include those employed in the IT department, customer services and small business.

With a 9 000-strong workforce, Telkom is adjusting to a shift in operating conditions, which have seen a significant move from voice to data.

The semi-privatised company, which operates in several countries in Africa, has also faced calls by Independent Communications Authority of South Africa to drop data costs.

Senekal voiced concern that the company had opted to lay off workers instead of opting to upskill employees for tech-driven jobs.

“Telkom employs a lot of contractors to do jobs that should be done by its workforce,” Senekal said.

The company’s interim financial results, released in November, showed that headline earnings dived 36%, while net debt increased by almost R2bn to R11.8bn.

Telkom is among several large organisations considering job cuts as the country battles high unemployment rates and tough economic conditions.

Last year, debt-stricken national airline, SAA, announced plans to reduce head counts, in a move which was fiercely opposed by unions.

This week, MassMart, which owns Game, DionWired and Makro, among others, announced on Monday that it was consulting with its employees about the potential closure of 34 stores. The move could affect up to 1 440 employees.

Massmart may cut 1 440 jobs

Source: EWN

South Africa’s Massmart Holdings could cut up to 1 440 jobs under a plan to close some stores, the retailer said on Monday as it struggles to grow sales in a tough economy.

Massmart, majority owned by US retail giant Walmart, swung to its first half-year trading loss in two decades last August, as low growth, high unemployment and a rising cost of living hurt South Africans’ spending power.

The retailer said in a statement it had started consultations with unions and other stakeholders around the closure of up to 34 stores, following a review that identified a number of outlets that were underperforming.

“A total of 34 Dion-Wired and Masscash stores and approximately 1,440 employees are potentially affected by this process,” it said.

Dion-Wired is Massmart’s electronics and appliances subsidiary, while Masscash is its wholesale division including cash and carry, food and cosmetics outlets.

Massmart shares, which sunk to a 13-year low last year after the retailer issued a profit warning, were up 2.4%.

A number of Massmart’s rivals, such as Shoprite, are also struggling in the difficult market conditions, and both retailers have also had to battle currency weakness elsewhere in Africa, especially Zimbabwe and Nigeria.

By Anneken Tappe for CNN Business

Machines are expected to displace about 20 million manufacturing jobs across the world over the next decade, according to a report released Wednesday by Oxford Economics, a global forecasting and quantitative analysis firm.
That means about 8.5% of the global manufacturing workforce could be displaced by robots.

The report also notes that the move to robots tends to generate new jobs as fast as it automates them, however it could contribute to income inequality.

The use of robots is on the rise: At this point, every new robot that is installed displaces 1.6 manufacturing workers on average, according to the Oxford Economics model.

Automation isn’t a new trend in manufacturing, of course. The automotive industry, for example, used 43% of the robots in the world in 2016.

But robots are becoming cheaper than many human workers, in part because of the falling costs of machines. The average unit price per robot has dropped 11% between 2011 and 2016, according to Oxford Economics. And they are increasingly capable of functioning in more sophisticated processes and varied contexts. On top of that, the demand for manufactured goods is rising.

China presents a big opportunity for growth in automation. That country already accounts for a fifth of the world’s industrial robots, with every third new one being installed there. Beijing “is investing in robots to position itself as the global manufacturing leader,” Oxford Economics said. By 2030, some 14 million robots could be working in China, “dwarfing” the rest of the world, according to Oxford.

The effect on economic output could be tremendous. Oxford Economics estimates that boosting robot installations to 30% above the current growth forecast by 2030 would lead that year to a 5.3% increase in global GDP, or $4.9 trillion. That’s more than the projected size of Germany’s GDP for that year.
So what’s not to love? Robots will boost productivity and economic growth, as well as spur industries that don’t even exist yet. But Oxford Economics also warns that they will be seriously disruptive.

How automation could lead to inequality
One potential downside to the robot revolution: Automation could increase income inequality.
“This great displacement will not be evenly distributed around the world, or within countries,” according to the report. “Our research shows that the negative effects of robotization are disproportionately felt in the lower-income regions compared with higher-income regions of the same country.”

The workers who drive knowledge and innovation within the manufacturing industry tend to be concentrated in larger cities, and those skills are harder to automate. That’s why urban areas will deal better with the increased automation, according to the report.

On the whole, the increased use of automation will likely create new jobs at a pace comparable to the jobs that will be lost, which nullifies fears about permanent job destruction, according to the Oxford study. That said, the poorer regions that are expected to lose the most jobs will probably not benefit equally from this new job creation due to a gap in skills. That will lead to increased income inequality between cities and rural areas, as well as between regions.
“Automation will continue to drive regional polarization in many of the world’s advanced economies, unevenly distributing the benefits and costs across the population,” the report said.

For policy makers, this means they will have to think about how the increased efficiency will hold up against the effect on income inequality. Some have already worked automation into their political platforms. Vermont Senator Bernie Sanders, who is running for the Democratic nomination for president, recently said he was worried about what artificial intelligence and robotics “will mean to working people in this country,” for example.

“We need to have a long discussion to make certain that millions of workers are not thrown out on the street because of robotics,” he said during a CNN town hall in February.

In the United States, Oregon, Louisiana, Texas, Indiana and North Carolina are the most vulnerable states, according to Oxford Economics. That’s because those states are reliant on manufacturing jobs that could disappear because of robots.

In Oregon, for example, “high dependence on manufacturing … and the state’s exposure to globally competitive sectors, means its workers are vulnerable to rapid technological progress”, according to the Oxford study.

On the opposite end of the spectrum, Hawaii, DC, Nevada, Florida and Vermont will see the least impact from increased robotization. Manufacturing plays a smaller role in those places.

By Jewel Stolarchuk for The Independent 

18 000 jobs in Deutsche Bank are set to be cut as the German national lender embarks on mass retrenchment exercise. Whole teams at the bank’s Asia-Pacific offices have reportedly been let go, as the lender seeks to transform itself from an investment bank that used to compete with the lenders in Wall Street, after struggling in the aftermath of the financial crisis.

Deutsche Bank employs about 4,700 employees in its Asia-Pacific offices in Singapore, Sydney, Tokyo and Hong Kong. The investment banking team in the region consists about 300 staff members and it is expected that 10 to 15 per cent of these employees and almost all the employees in the equity capital markets division will be retrenched.

According to Reuters, the restructuring plan will ultimately cost 7.4 billion euros (SGD $11.31 billion) and will see the bank cut back on its fixed income operations and axe its global equities business altogether.

Most of those retrenched are working in the bank’s offices in Europe and the United States but some offices from Sydney to Hong Kong were also affected. Retrenched workers are due to sign redundancy packages.

One Deutsche bank employee, an equities trader based in the Hong Kong office who declined to be named, told Reuters that staff were called individually to meetings and that the mood was “pretty gloomy” as the job cuts began. He said: “(There are a) couple of rounds of chats with HR and then they give you this packet and you are out of the building.”

While a Deutsche Bank spokeswoman declined to comment on specific departures, an insider who is familiar with the bank’s Australian operations told Reuters that most of the mergers and acquisitions staff would not be immediately affected but the teams in the four-strong equity capital markets were being retrenched.

The Deutsche bank spokeswoman assured the press that the bank would be directly in touch with employees. She added: “We understand these changes affect people’s lives profoundly and we will do whatever we can to be as responsible and sensitive as possible implementing these changes.”

Deutsche Bank’s Chief Executive Officer Christian Sewing called the retrenchment exercise part of a “restart.” In a letter to employees, he wrote: “We are creating a bank that will be more profitable, leaner, more innovative and more resilient.”

This “restart” comes on the heels of Deutsche Bank’s failure to merge with its rival Commerzbank. In May, Mr Sewing hinted at extensive restructuring as he promised shareholders that he will implement “tough cutbacks” to the investment bank.

How it will impact South Africa

According to an article by Business Insider, the Sandton headquarters employ approximately 70 staff.

  • The equity trading desk will be closed completely, with the loss of around 12 jobs
  • The fixed income team, which trade bonds, will remain largely unchanged in South Africa

The bank suffered a pre-tax loss of €16-million (R251,5-million) on its South African activities last year, according to the Deutsche Bank annual report.

Standard Bank has announced that it will close 104 of its branches by June 2019. This comes after an announcement by the bank in March that it planned to close more than 91 branches.

The bank’s efforts to digitise its retail and business bank is expected to impact more than 1 200 jobs, as staff members are retrenched to make way for self-service offerings.

Standard Bank has published the full list of branches which will be closing across the country on its website. It also outlined the branches where customers affected by the closures can go instead.

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