Impala announces potential job cuts due to low PGM prices
Impala Platinum (Implats), a leading producer of platinum group metals (PGMs) has announced that it may be forced to lay off some of its employees due to ongoing financial challenges.
The company cited low PGM prices, rising inflation and global economic uncertainty as key factors squeezing profitability.
Implats says cost-cutting measures implemented in 2023 and early 2024, including salary freezes and voluntary buyouts, have not been enough. Implats owns 87 percent stake in Zimplats, Zimbabwe’s largest platinum company.
Zimplats has since announced plans to implement cost cutting measures including job cuts.
Implats plans to initiate a Section 189(3) consultation process outlined in South Africa’s Labour Relations Act. This could lead to job reductions at its South African mines (Impala Rustenburg, Impala Bafokeng, and Marula) and corporate headquarters.
“The overall PGM pricing environment continues to pose a serious challenge to the sustainability of our business,” said Nicco Muller, Implats chief executive in a recent internal memo.
“PGM prices, together with persistent inflationary pressures and continuing global macroeconomic uncertainty, have caused enormous pressure on profitability and cash flow across the entire PGM sector, our operations included.
“As you are all aware, we have implemented several cost curtailment and cash preservation measures over the course of last year and in the first few months of 2024. Management salary increases were deferred and many of our operations, including the Head Office, offered voluntary mutual separation packages.
“We have revised business planning parameters for all our operations and contemplated various measures to optimise both operational efficiencies and resources. Unfortunately, these efforts have not produced the desired results.”
The company emphasized a commitment to a fair and transparent process. No final decisions have been made on the number of potential layoffs, but Implats expects roughly 9 percent of its South African workforce could be impacted.
A minimum 60-day consultation period is required by law, with an expected conclusion by June 25th, 2024. During this time, affected employees will have the opportunity to apply for voluntary severance packages.
Implats acknowledges the difficulty “this news” presents for employees and their families. The company stressed its commitment to managing the process fairly and transparently, with ongoing updates provided throughout the consultation period.-ebuisnessweekly
