JD Group, the country’s largest listed furniture retailer, is processing its third batch of retrenchments this year, according to the SA Commercial, Catering and Allied Workers Union (Saccawu).
The troubled retailer is set to retrench about 467 employees from its head office in Braamfontein and its warehouses nationally.
A source, whose name is withheld for fear of victimisation, said letters of retrenchment were distributed to almost 800 employees last Friday and Monday. Employees were urged to reapply for their jobs.
Saccawu’s national education secretary, Mike Sikani, who was part of the retrenchment negotiations, said previous batches of retrenchments this year were in March and May. He would not confirm the number of employees who were retrenched, but said the current batch of retrenchments was “abnormally high”.
Sikani said 163 employees had accepted offers to keep their jobs on condition that they moved across the country.
He said the company was “looking for ways to re-employ a further 184” at skilled levels.
Sikani said the company was restructuring and changing its business model in an attempt to survive financial strain. He said the company had closed down most of its “hubs” or warehouses in the region during a process of consolidation.
He said Saccawu and JD Group had looked at the possibility of “alternative employment”, including upskilling staff to suit the firm’s needs.
JD Group has been the worst performer on the JSE’s general retailers index, shedding 34 percent this year.
The company was dealt a double blow due to its exposure to unsecured lending and slower furniture sales.
For the year to June, the group increased its provisions for bad loans while its retail division reported a decline in profit. The company provides unsecured loans mostly to the lower end of the market.
Competitors Ellerines and Lewis have also been affected by lower sales and the unsecured lending pullback.
The company employed 25 911 people nationally and 840 people in other African states, such as Zambia, Botswana, Swaziland and Namibia, according to its integrated report for 2012. The bulk of employment, about 14 000, is in the “semi-skilled and discretionary decision-making” category, which is likely to be where most job cuts are made.
The retailer with 1 307 outlets nationally, owns furniture stores including Joshua Doore, Russells and Barnetts; electronic stores such as HiFi Corp and Incredible Connection; and building materials supplier Timbercity, among others.
JD Group investor relations manager Ian Nel said management was unavailable for comment.