JOHANNESBURG – Construction company Group Five said on Wednesday it had cut jobs and split up its loss-making engineering and construction division as part of a restructuring.
Group Five, which operates in 12 countries in Africa and Europe, did not give further details on the job cuts and said additional guidance would be provided once the process had been completed.
In its 2016 annual report, Group Five said its employees in the Southern Africa region were about 7 470 and 1 145 in the rest of Africa.
South Africa’s construction industry has slowed down sharply since the 2010 FIFA World Cup as infrastructure spending by President Jacob Zuma’s government has stalled and weak commodity prices have hit demand from the mining industry.
Group Five said its restructuring, supported by Deloitte Consulting, led to the implementation of voluntary and forced retrenchments that are set to conclude at the end of June.
The company, which makes 81.2% of its group revenue from the engineering and construction division, said that business had now been split into Construction: South Africa, Construction: Rest of Africa and engineer, procure and construct.
“These changes are aimed at unlocking shareholder value and addressing mainly the loss-making Engineering & Construction cluster,” the company said in a statement.
“These changes will result in more focused businesses with appropriate resources and cost bases relevant to the regions and service offerings provided.”
The impact of the retrenchments will be included within the company’s results for the second half of 2017.
Group Five recorded its first six-month loss in 11 years in February due to a R255 million ($19 million) settlement with the country’s government.
The company said the process of appointing a permanent chief executive was well underway after it appointed Themba Mosai as interim CEO to replace Eric Vemer who left in February after more than two-years at the helm. ($1 = R13.3700)