Moneycontrol
Get App
you are here: HomeNewsBusiness
Last Updated : Jul 10, 2019 09:14 PM IST | Source: PTI

ArcelorMittal to cut 2,000 jobs in South Africa

The group, the world's largest steelmaker, employs a total workforce of 8,800 in South Africa.

Global steel giant ArcelorMittal said July 10 it could slash nearly a quarter of its workforce in South Africa in a bid to curb costs as it expects to fall into the red in the first six months of this year. "A large-scale restructuring is contemplated, and it is anticipated that in excess of 2,000 positions may be affected," ArcelorMittal said in a statement.

The group, the world's largest steelmaker, employs a total workforce of 8,800 in South Africa.

The proposed job cuts are certain to pile more pressure on the government of Cyril Ramaphosa which is battling a weak economy and near record unemployment of more than 27 per cent.

Close

South Africa's banks, mining and construction sectors have signalled mass layoffs as gross domestic product contracted by 3.2 percent in the first three months of 2019.

ArcelorMittal said that "due to the difficult domestic economic environment, the South African steel industry continues to face significant challenges." Certain costs "that are not within the company's control such as high electricity, rail, port, and primary raw material costs have contributed to these challenges," it said.

ArcelorMittal -- which supplies more than 70 percent of South Africa's steel -- said that it expects to turn in a loss for the first six months, triggering a sharp drop in its share price.

"Headline earnings for the period (are expected) to decrease by at least 650 million rand ($46 million) to a headline loss," the statement said, noting that in the corresponding year-earlier period it booked a profit of 54 million rand.

The steelmaker is scheduled to publish detailed first-half results next month.

Get access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.
First Published on Jul 10, 2019 09:13 pm
Loading...
Sections
Follow us on
Available On
PCI DSS Compliant