Pick n Pay trims workforce

18 June 2020 | Business

Pick n Pay announced today that it will be restructuring its operations in an effort to set the business on a path to sustainability.

The 100% Namibian-owned entity that employs 1931 people at its 22 retail stores in most major towns in Namibia and is subsidiary of the Ohlthaver & List (O&L) Group, said the retrenchment will result in more than 500 Namibians losing their jobs.

Pick n Pay managing director Graeme Mouton said that due to the prolonged economic downturn and reduced consumer disposable income, the company experienced marginal to negative turnover over the past five years. “Furthermore, while the recession has steadily eroded turnover, costs have increased above inflation on all fronts, resulting in a decline in profit, leading to losses over the last two years. Covid-19 and lockdown only compounded an already dire situation, necessitating business realignment in order to secure the business and jobs into the future.”

He said that a restructuring exercise aimed at reversing losses and setting the business on the path to sustainability was initiated.

Mouton said that in addition to various cost cutting measures, the company also offered employees voluntary separation packages and early retirement options.

“However, the uptake on these offers were low, resulting in extensive dialogue through which the company presented the employees with the option of retrenchment or alternative measures aimed at reducing costs without job losses.”

He explained that in an attempt to avoid retrenchments, Pick n Pay engaged the Namibia Food & Allied Workers Union (NAFAU), with which the company has a recognition agreement, to propose various alternatives to retrenchment in March 2020.

The following proposals were presented to the union leaders for consideration:
• That employees agree to forgo the annual salary increase as well as a 13th cheque this year, but that going forward, the 13th cheque would be converted to a performance-based bonus whereby bonuses will only be paid once the company is profitable;
• That the cash card discount benefit which Pick n Pay employees enjoy, be reduced; and
• That Sundays be included in the normal 6-day working week, calculated monthly instead of weekly as is currently the case.

According to Mouton, all efforts were made to identify alternative measures to save the business while guarding as many jobs as possible.

“Various rounds of discussions with the union and shop stewards were unfortunately unsuccessful in finding an alternative to retrenchments. We also considered the proposals presented by the union, however these options did not deliver the cost-savings required to sustain the business. The employees, through the shop stewards and union, regrettably rejected the company’s proposal, opting to rather follow the retrenchment route.”

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