The Pick n Pay share price recovered to close stronger on Monday following news the half-year earnings figure would take a hit from the most severe staff reduction programme yet implemented at the retail group. The share price initially fell 3.4% to R59.26 on news that the cost of the voluntary severance programme (VSP) would drag down headline earnings per share by more than 20% in the six months to end August 2017. This 20% hit points to interim earnings of about 65c a share. But it recovered to close at R63.41 as analysts realised the cuts would reduce employee costs over the long term. “It seems it was employees who had worked for the group for several years, sometimes decades, who were more inclined to accept the relatively generous severance package,” said one analyst, noting this category of worker was usually employed on more attractive terms that offered less flexibility for the employer. “As the group opens up new stores, people will be employed on the tougher terms offere...

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