Massmart begins retrenchment talks
About 1,440 employees may be affected as the retailer battles to contain rising costs
Walmart-owned retailer Massmart, whose brands include Makro and Game, said on Monday it could retrench about 3% of its workforce as it continues a turnaround strategy under new CEO Mitchell Slape.
After conducting a store optimisation project that highlighted a number of underperforming stores, the group began consultations that could affect 1,440 employees across 34 DionWired and Masscash stores, the company said on Monday.
As of the end of June 2019 Massmart had about 46,500 full-time employees, at 441 stores.
In May 2018 Walmart announced it was sending in Slape, one of its top executives, to take over from Massmart CEO Guy Hayward, with the company struggling as costs rose faster than sales.
In July, the company reported its first trading loss since listing on the JSE in 2000, saying that in the 26 weeks ended June 2019, employee costs had risen 8.6% year on year, while sales had risen 5.5%.
Factors pushing up costs included increased municipal tariffs and electricity costs as well as load-shedding, the company said at the time.
In morning trade on Monday Massmart’s share price was up 1.07% to R49.33