Property giant Pam Golding said on Tuesday that the impact of South Africa's technical recession, the coronavirus pandemic and the ongoing impact of a two-month freeze on the real estate industry had forced it to begin planning a restructure, which could include job cuts.
The decision was "hard but prudent" and aimed at ensuring the group's long-term sustainability, said group Chief Executive Officer Dr Andrew Golding.
“The global pandemic has shut down and disrupted economies world-wide and South Africa’s economy has not escaped the dire impact, with the real estate industry in particular brought to the brink of collapse. The whole world finds itself in a fundamentally new environment characterised by significant volatility, uncertainty, complexity and ambiguity," Golding said.
"Regrettably, we have had to contemplate reducing our staff complement in order to bring it in line with the realities of the economy and the new real estate market going forward," he added.
Golding stressed that the restructure would not affect the company's areas of operation, adding that franchise businesses were independently owned and operated and would continue to service all regions and areas across the country.
"The result of this restructure will be a more efficient and streamlined business that will continue to offer the very high levels of service excellence and sales success that clients have come to expect from us over the past 44 years," he said.
PGP said that while the lockdown had had a severe impact on the group, it had, however, revealed that it was possible to operate to a large extent virtually and that it had presented the opportunity to increase the level of remote working, an approach that would continue for the "unforeseeable future" as the housing market remains under pressure.
Even outside of the impact of the pandemic, Golding said, the world of real estate had changed "irrevocably".
"Looking ahead, we are of the opinion that the economic downturn will continue – GDP is predicted to decline by between 5% and 10% this year - and that the housing market will remain under significant pressure, despite the fact that we do anticipate a short-term positive uptake from pent-up demand, particularly at the lower end of the market, given the lower interest rates as well as the fact that there are serious and savvy buyers capitalising on sound purchasing opportunities."
Statistics South Africa said early in March that the South African economy shrank by 1.4% in the fourth quarter of 2019, according to its Gross Domestic Product numbers, plunging the country into a fresh technical recession. Shortly afterwards, President Cyril Ramaphosa announced a national lockdown in a bid to limit the spread of Covid-19.
The lockdown brought various sectors of the South African economy to a halt, which had a dire impact on businesses and is expected to spike unemployment as the year progresses.