EXXARO Resources has confirmed union reports that it is planning job cuts.
Exxaro said these form part of a group restructure to improve productivity and efficiency and to streamline its corporate and support services organisational structures.
This announcement comes just weeks after Mxolisi Mgojo took the helm as Exxaro’s new CEO. But Mzila Mthenjane, executive head, strategy and stakeholder engagement, said this process follows earlier restructuring processes, which included voluntary retrenchment, and were part of a longer term focus on streamlining the business.
Exxaro said it has informed trade unions that it is mulling retrenchments which could lead to the loss of between 192 and 565 jobs at its corporate office and operations. It currently employs about 7,300 people.
Mthenjane said the restructure “should be seen in the context of the mining industry operating environment and how mining companies are responding to the turmoil”.
Exxaro has embarked on two initiatives previously, including voluntary packages, “but as commodity prices have been getting lower we are having to have a more severe response.”
Over the years, as it has sold or got out of some businesses like mineral sands and zinc, it never never really restructured the support services and corporate offices accordingly.
He admitted various reports of Exxaro owning planes and helicopters, saying Exxaro was a much larger organisation three to five years ago, with a wide footprint in Mpumalanga, the Northern Cape and Republic of Congo.
“From a travel efficiency perspective, we had those [assets] but there is no longer a need”, he said.
Gideon du Plessis, secretary general of trade union Solidarity, said he had expected the retrenchments as Exxaro lost the Arnot contract with Eskom, and Arnot has about 2,000 employees.
In addition, he said and all the mining houses were in the process of reducing head office and support services staff.
He added that Exxaro has always taken “a responsible and conservative approach to these [retrenchment] exercises” and has hardly ever retrenched the full number of people proposed.
Exxaro has also indicated it would look first at expatriates, people on fixed term contracts and those close to retirement before permanent employees are affected.
“If I look at all austerity measures it put in place before retrenchment, it indeed looks like an act of last resort – it has already embarked on numerous measures like renegotiating contracts, stopping external training, selling planes etc,” du Plessis said.
