Staff Writer
Pupkewitz Group plans to retrench part of its workforce as part of an on-going restructuring of the company.
Although details remain sketchy as to how many employees will be affected by the group’s decision, a voluntary retrenchment offer has been put on the table for all employees of the diversified group to take up.
“All employees of the Pupkewitz Group have been offered a voluntary separation package with a redundancy process to follow by the end of June. We believe that this decision will allow us to serve the greater good by securing the jobs of the vast majority of our 1,860 employees,” Pupkewitz Holdings Chairperson, Mike Leeming said.
“With Namibia’s economic decline driven by factors that are outside of the Group’s control and intensified dramatically by the global pandemic, our business has felt the effects in a very material way. The Group finds itself in a position where more drastic action is required to restore some of our businesses to financial health.”
He attributed the company’s decision to a downturn in sectors that the company is exposed to through its operations and also the emergence of Covid-19.
“The Group’s main businesses are exposed to the construction industry, the motor industry and the tourism and hospitality industry, all of which have experienced severe downturns over many years and magnified in recent months. The construction industry has shrunk for 16 consecutive quarters and is estimated to be only 40 percent of what it was in 2016. A further 16 percent reduction is forecast by the Bank of Namibia for 2020. The motor industry had shrunk to almost a quarter of its size compared to 2016 even before Covid-19 hit. In the month of April, only 50 new vehicles were sold in the whole of Namibia and new car sales are unlikely to return to their former heights in the foreseeable future,” Leeming said.
“The impact that the poor state of the economy has had on consumers, especially their ability to purchase cars and homes, is notable. As far as the tourism and hospitality industry is concerned, unprecedented difficulties are being faced with tourism having been brought to a virtual standstill as a result of the global pandemic.”
He said despite efforts by the Group to reposition its businesses, such initiatives have not been sufficient to offset the decline in its traditional markets.
“Large cost cutting exercises have been carried out across the Group over four years in an attempt shrink costs in line with falling revenues. We have actively pursued options that would allow us to avoid retrenching staff and have managed personnel costs on the expectation that our markets would rebound. Unfortunately, the further turmoil that Covid-19 has unleashed renders the current circumstances unsustainable. We deeply regret the impact that letting go of some of our staff is going to have on all of our people and their families during this challenging time in the world and in Namibia in particular, “the Pupkewitz Chairperson said.
The job losses at Pupkewitz come as many companies have resorted to salary and job cuts as part of survival mechanism, a move which could cause the country’s unemployment rate to skyrocket.
Pupkewitz was founded over 100 years ago and has an interest in construction, catering, agriculture and finance.
