South Africa’s Aveng Grinaker-LTA, a subsidiary of construction firm Aveng Ltd is set to retrench 2,863 workers, National Union of Mineworkers (NUM) said mid this week.
The construction firm said that the move has been informed by the fact that most of its projects in South Africa were about to be completed.
NUM said that Aveng Grinaker-LTA also observes that the firm’s pipeline of new construction had dried up. Spokesman for the South Africa mineworkers union Livhuwani Mammburu, however said that they wanted the plan to lay off workers halted.
South Africa’s unemployment rate is currently at a 14-year high of 27.7% and work in the construction industry has slowed sharply.
Aveng has been in business for more than 125 years and employs around 15,500 people. However due to financial difficulties that has plagued the firm it has been forced to contend with1,400 jobs cuts in its latest financial year.
In August 2017, the firm announced that it had ended talks to sell its steel arm due to what its CEO said was failure to reach agreement
Work for South African construction industry has slowed sharply. Government contracts stalled and weak commodity prices have hit demand from the mining industry. Companies have had to employ new strategies to survive in a sector stunted by an economy that is not stagnant.
In September last year, Chief executive officer of the struggling construction firm Kobus Verster resigned.The CEO had been appointed to the top job in 2014. Eric Diack, who was executive chairperson, assumed the duties of CEO.