Massmart Group has started retrenchment consultations at its Game stores in South Africa that could affect up to 1,800 employees.
In a statement on Tuesday, Massmart said the process follows an “assessment of opportunities” aimed at improving Game’s efficiencies.
“Consequent to this project, Massmart advises shareholders that the group has commenced, with respect to its Game stores in South Africa, a consultation process in terms of section 189 and section 189A of the Labour Relations Act 66 of 1995, as amended, with organised labour and other relevant stakeholders,” it said.
Massmart, which is owned by US retail giant Walmart, announced in March that it was closing down 23 Dion Wired stores. This followed a previous announcement in January that it had started a section 189 process that would affect 1,440 Dion Wired and Masscash employees.
It cited South Africa’s economic recession, which dampened consumer activity on non-essential items such as TV sets, as a major reason.
As of December last year, Massmart had 51,000 employees working in 443 stores. Its turnaround plan announced in January envisages two divisions instead of the current four.
These include Massmart Retail, which will consist of the Builders, Game, DionWired and Cambridge Food trading brands, and Massmart Wholesale, which will consist of Makro, Shield and wholesale cash brands.
Massmart’s announcement follows those of several other companies in recent weeks, including mobile operator Cell C, fashion retailer Edcon and SA broadcasting Corporation (SABC).
Last month, President Cyril Ramaphosa warned that more job losses are expected as the full impact of the COVID-19 pandemic takes effect, but urged employers to strike a balance between business sustainability and jobs.
He said, “We would urge that the difficult decisions to be taken are taken with care and with due regard to balancing the sustainability of companies and the livelihoods of workers. It is important that whatever is done is underpinned by ensuring a just transition to all concerned.
“The measures we put in place to protect local businesses during the lockdown in the form of loans, tax relief, debt restructuring, extended credit lines and retail rental exemptions are continuing to provide vital support.”
The African National Congress (ANC) and Economic Freedom Fighters (EFF) have also urged SABC not to retrench workers at the public broadcaster.