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Job cuts expected at SAB

Around 500 workers received Section 189 letters on January 31 proposing termination of their employment.
A worker inspects a beer bottle as crates move along a conveyor belt on the production line at the SABMiller Alrode plant. Image: Waldo Swiegers, Bloomberg

Yet another major corporate – AB InBev’s South African Breweries (SAB) unit – is looking at cutting jobs, in the face of tough economic conditions in the country.

Moneyweb has learnt that between 300 and 500 jobs could be on the line at SAB, after being alerted by worried workers who received Section 189 letters on January 31, proposing termination of their employment.

“Many of us have received letters saying our jobs could be cut and this has caused panic and confusion, especially for those who have been working at SAB for years,” said one worker on condition of anonymity.

The move has not only surprised workers but the Food and Allied Workers Union (Fawu), which noted that SAB agreed not to embark on mass retrenchments for five year after its former parent company SABMiller merged to become part of Belgian-based global brewing giant AB InBev in 2016.

Fawu Deputy General Secretary Mayoyo Mngomezulu tells Moneyweb that the union is set to thrash out the matter at the Commission for Conciliation, Mediation and Arbitration (CCMA) on Wednesday.

“This is just not on and we are going to fight this move by SAB…. We have no doubt that the planned retrenchments are in some way linked to the 2016 merger and that the group’s foreign owners want to cut jobs in order to maximise profits.”

Read: AB InBev turns to solar power amid SA blackouts

Mngomezulu noted some 500 SAB workers had received notices of the planned retrenchments at the end of January, which follows around 33 workers having been retrenched by the group last year.

“We will have to hear what they say at the CCMA, but we are not taking this lightly…. SAB currently employs around 5 700 workers in SA, which means if they eventually cut 500 jobs that’s about 8% of the group’s workforce in the country. We can’t afford any more job cuts both as a sector and as a country,” he said.

SAB spokesperson Refilwe Masemola confirmed to Moneyweb that the group is looking at cutting staff. However, she insisted that the move is not “merge-related” and instead linked to the operating environment.

“SAB confirms that it is currently in the process of reviewing its business operations, in light of the prevailing economic conditions in South Africa. The review, which is in line with the October 2016 merger conditions, will affect only a small minority of its workforce in specific areas and not across the business as a whole,” Masemola said in an emailed statement.

Read: Job cuts are not an option, Minister Mboweni

“2020 marks SAB’s 125th anniversary, and the company remains committed to its long-term prospects in South Africa. Businesses need to constantly adapt to change to maintain efficient, sustainable and competitive organisations. In doing so, SAB will at the same time, implement actions to identify growth opportunities that could create future employment prospects, thereby enabling SAB to return to its current level of employment,” she added.

SAB confirmed that it has applied for the Section 189A process, which will be facilitated by the CCMA, in consultation with Fawu. However, the group did not give any further detail on how many workers had been given the letters proposing termination of employment, or on ultimately how many workers will be affected by the retrenchment plans.

Meanwhile, Mngomezulu said Fawu would be consulting its lawyers following the meeting with SAB’s management at the CCMA on Wednesday.

“We are going to get legal opinion based on what SAB say at the meeting…. The food and allied sector have already lost too many jobs in the last year. Other companies like Tongaat Hulett and RCL, as well as unlisted groups such as Illovo Sugar, have been cutting jobs that run into several thousand. Many are not done and retrenchments are continuing,” he said.

Read: Massmart could cut 1 440 jobs

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The problem is not SAB – it is ANC.

Jobs cut were expected as far back as 2016, 5500 people were meant to lose their jobs after the buyout of SAB. South Africa is not the only market affected by job cuts; India is also battling job cuts, Belgium is battling job cuts. It’s not about the ANC or FF Plus…. it’s about the bottom line and keeping the shareholders happy

Correction: the US economy is NOT cutting jobs as far as I know, yet part of global economy. Why are US shareholders generally happy?

The speed of decline started in 2015 after SA’s “Nenegate”.

Indeed.
@MichaelFromKlerksdorp the US unlike everyone else isn’t shedding jobs because people’s salaries aren’t rising there. Also people lose their manufacturing job and go on to work as Uber drivers.

So yes the force for better pay in South Africa compounds our problem but fixing salaries isn’t going to help much. We can’t keep paying mine workers R3500 just so that 4 can do the work of 1. Shareholder need to voice out against such.

This is just the start. Many more multi nationals will be following suite and many businesses face closure

For every action there is a reaction:

Conversely, the Government cannot solve the problem, WHEN THEY ARE THE PROBLEM

Their actions and subsequent policies effect not only the so called wealthy, but the masses.

The blue collar worker, the pillar of society, the few middle class we have left, they who carry a population of 55 million, theses same tax payers who contribute 50% to State Coffers will disappear making this country a Welfare State

This in my opinion is the beginning of the end unless we get strong leadership and start downscaling Civil Servants

Struggling consumers are buying less
Business is suffering as a result of Load Shedding and uncertainty
Business is Downscaling due to turnovers dwindling, profits under threat
No Capex by large business
Big business going off shore
Tax Payers immigrating
The Property Market is not even a shadow of what it was 2 years ago

The Government will start running out of Tax Payers and professionals relocating to greener pastures

But, as my learned friend always says, “when they got rid of the skill, they chose the path to destruction, and we all knew this would happen”

Solution?

A tax revolt

Bought SABMiller for R55. Forced to sell at R920 by #ABInbev. Took the cash offshore and have not stopped smiling ever since.

The chickens (horrible government policies) are coming home to roost.

Job cuts are global phenomenon. Check what’s happening in India. It’s all part of Ab INBEV cost cutting madness.

Its not madness..its business. Why pay people to do nothing?

Any feedback on whether the merger was actually good for SAB a south African institution or was this like Walmart/massmart doomed to failure or Edcon plundered by a Private Equity buy out.

Mergers and Acquisitions are so rarely beneficial

Major country highlights
US: Best market share trend since 4Q12, with 9 of the top 15 share gainers1
Mexico: Revenue and EBITDA growth despite unfavorable Easter timing
Colombia: Volume and revenue growth, with global brands up over 60%
Brazil: Outperformed the market with double digit volumes in beer and non-beer
South Africa: Challenging quarter given Easter timing and segment mix shift
China: Revenue and EBITDA growth despite earlier Chinese New Year
© AB InBev 2019 – All rights reserved 8
Notes:
(1) According to IRI

The SAB buy out was probably a tactic to get rid of a competitor and rationalise AB-Inbev production.
Any non-fitting parts of the business will be shut down.
This was bad for SA, but not a surprise in light of the ANC’s policicies towards business.
As was the Anglo departure.

These Union People are very very clever. One wonders why they do not open Super Businesses that can employ the retrenched workers?

But, SAB won’t cut jobs unless they need to. SAB is not an SOE.

Maybe preempting the effect of the raise in “sin taxes” later this month.

It is something everybody normally laughs about.

There you go Tito. Have a laugh.

This is just not on and we are going to fight this move by SAB…. We have no doubt that the planned retrenchments are in some way linked to the 2016 merger and that the group’s foreign owners want to cut jobs in order to maximise profits.”

Yes FAWU, thats how business works, maximising profits. Maybe you should read up on Eco 101. Unlike you that collects union fees to feed your lifestyle. You can scream and posture all you like, union days are numbered so make the most while you can.

Take note Treasury! The country is GETTING SMALLER economically (like Zim or Venez.) Your SARS collection targets are unrealistic & should be adjusted down.

Size of Govt needs to be halved!!!

The fiscal cliff is moving nowhere….fixed object. But socialist ANC-regime’s irresistible force is sliding in that direction.

“Size of Govt needs to be halved!!!” Anticipate one of the many Deputy Ministers or Committee Chairs answering your Uber Eats or Takalot Delivery call ….

Thats just a tip of an iceberg, wait until the agreement that was signed not to retrenched lapses – Carlos Brito et al will be cutting cost like crazy

““This is just not on and we are going to fight this move by SAB…. “. Well one could say in the same vein that EWC is just not on. And that Eskom’s load shedding is just not on. And that the prospect of banning private medical aids is just not on. Well Mr Mngomezulu, what we can say for sure, it’s all a function of what your organisation and its allied fellow comrades who have brought this whole economic melt down on. No?

Proudly brought to you by the ANC…

How are SAB’s competitors faring? Heineken SA (including Amstel/Windhoek/Tafel), and the craft breweries? I can only imagine that SAB’s portfolio of beers has serious competition, even without the prevailing economic conditions.

If you are no longer required as a part of an establishment why force your stay… no matter how low your job title.

End of comments.

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