Downturn dampens Christmas spirit

2008-11-14 00:00

Cash-strapped companies have cut Christmas bonuses and downscaled Christmas parties.

A Durban advertising agency has given the go-ahead for the annual Christmas party, but will not be paying bonuses. Instead, employees will receive a gift voucher. A major chemical manufacturer is still providing a 13th cheque, but the staff dinner at a posh restaurant has been downscaled to pre-Christmas drinks.

Those hardest hit are manufacturers of semi-durable consumer goods and furniture, clothing and vehicle retailers. While larger corporates have been able to weather the financial storm and can still provide workers with some form of celebration, small- to medium-sized companies, including specialist manufacturers, law firms and other professional services that employ between 20 and 300 people, have asked employees to tighten their belts.

Pietermartizburg economist Clive Coetzee said most employees would understand the reasons for not giving a bonus this year.

One employee told Weekend Witness that in her company there is no talk of cutting bonuses, but of retrenchments. In certain instances, employees and directors have negotiated pay cuts, which remain in effect until the company gets back on its feet.

Said Kwanele Gumbi of Durban Chamber of Commerce and Industry: “Not receiving a bonus is not as severe as losing one’s job. Some companies will close down and this is far worse than not receiving a bonus.”

But it is a chicken-and-egg situation. Christmas bonuses usually pay for big-ticket items. No bonuses mean retailers and manufacturers can expect a slump.

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