Iscor, Africa’s largest iron and steel producer, plans to lay off more than 1 300 workers by the end of the year in a bid to cut costs, a company spokesperson said on Friday.
To remain competitive internationally and increased input costs are the reasons given by Iscor’s group executive for corporate affairs, Phaldie Kalam, for the move.
”Despite massive global price increases in the industry, this has been offset by the strong rand, which means in dollar terms our input costs increased by 24%,” he said.
Rival international companies take out between 1,5% to 2% of their costs every year, he added.
”For Iscor to remain competitive it, therefore, has to look at its cost structures on a continuous basis.”
Kalam said there are two processes involved in the layoffs. The first is shared services, which involves combining all support services into one division. This will result in 308 job losses.
”This was negotiated with trade unions and would be completed this year.”
The second process is continuous improvements, which includes cutting costs to remain competitive.
”We expect this will affect another 1 000 jobs and negotiations are under way with trade unions.”
Kalam said the first phase of staff cuts will involve voluntary retrenchments.
”We expect to get close to our target figure through voluntary retrenchments, otherwise we will have to look at other measures.”
The staff cuts are expected to occur by the end of December this year and this will result in an annual saving for Iscor of R120-million, he said. — Sapa