More job losses loom in Pietermaritzburg

2019-08-12 14:01

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While the sluggish economy has already cost the city hundreds of jobs this year, the Pietermaritzburg Chamber of Business has warned that more retrenchments are on the cards as companies downsize to remain profitable.

PCB chief executive Melanie Veness said there has been significant shedding of jobs in Pietermaritzburg.

Among the companies which have closed their doors recently are Interpak Books, BSI Steel, TDM, and several restaurants.

Other major corporate names that announced significant cuts include the likes of Standard Bank, Absa and Group Five, among many others.

Last month, Hulamin and Eddels Shoes also announced that they had started negotiations that will likely lead to about 496 jobs being cut between them.

Veness said the slow growth of South Africa’s economy, which is running below one percent, and high inflation are some of the driving factors.

She said: “The economic situation is dire. All our costs are going up, but the economy is not, and companies still have to compete on the international market, but they can’t add to their pricing to increase the turnover otherwise they risk pushing themselves out of the market, so it becomes harder and harder to accommodate the additional costs.”

Veness said this is the reason the chamber had warned Msunduzi Municipality against double-digit tariff increases, which she said cripple local businesses.

“Something’s got to give and unfortunately it lands up being people because companies in the private sector have to operate on such knife-edge margins,” said Veness.

“A lot of government increases have been double digits, which is twice the inflation, and it’s irrational. Business is under massive pressure.

“All sectors seem to be battling at the moment. With a slow growth rate, you are not likely to find people being successful.”

Veness said while the retrenchments were an indication of the current economic climate, in Pietermaritzburg the urban decay as well as unreliable supply of basic services such as water and electricity had also contributed.

“When there are power outages the factories lose production and sometimes the equipment is damaged and that can take time to repair because some of the equipment they are using is imported.

“Government’s mandate is to create conducive environments to work in. That means a steady supply of services. Without that support it makes it hard.”

Noma Kanyile, Hulamin group communications manager, confirmed that 200 roles may be affected.

Kanyile said since the end of 2018, market conditions for Hulamin’s products had become notably more challenging. She said: “Cost reductions have become necessary and are likely to affect both direct and indirect employees,” she added.

Cosatu regional co-ordinator Zima­sile Giyama said it was concerning that employees were always “on the chopping block” when companies face profit loss. “Why are profits being protected at the expense of the employees? No one says anything about the benefits of the executives. While the employees are retrenched, the captains of the industry continue racking up millions.”

Julie Smith of the Pietermaritzburg Economic Justice and Dignity Group said households will take strain as “money is going to have to be spread further. The people who were working, were not earning enough to put aside savings, specifically in time for this. When you get retrenched you tend to leave with almost nothing.

“There is enormous pressure on the breadwinner. Now all of a sudden to wake up and find that they no longer work is devastating. You really get thrown into very deep levels of poverty quickly and it’s hard to get out of that.”

Read more on:    pietermaritzburg

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