PetroSA expects to shed 500 jobs

PetroSA plans to shed about 500 jobs due to its "precarious" financial position.
PetroSA plans to shed about 500 jobs due to its "precarious" financial position.
Image: Reuters

PetroSA has announced that it will likely shed about 500 jobs due to its “precarious” financial position.

In a letter addressed to Solidarity union’s Holland Chapman, PetroSA CEO Pregasen Naidoo said the company had in recent years experienced depleted gas reserves.

“PetroSA is in a precarious financial position which makes operational costs unaffordable. At the end of March 31 2021, the forecasted cash position is R1.9bn. Therefore the company will not be able to fulfil its financial obligations unless drastic measures are taken to turn around the precarious financial situation it finds itself in,” wrote Naidoo.

The company intended to engage the union about a possible staff reduction which would lead to the termination of employees’ services.

“The company has considered the option of retaining the current headcount. However, this option is not viable.”

Naidoo said the company had embarked on numerous interventions to trim costs, including:

• The review and adjustment of budgets

• Negotiating discounts on third party contracts

• The deferment of capital expenditure; and

• Limiting external recruitment.

The company will explore other measures to limit headcount reduction such as offering voluntary separation and early retirement.

“At this stage the anticipated proposed impact of the restructuring will cut across all levels and will affect approximately 500 employees.”

The company is yet to make a determination on selection criteria.

It said it would notify employees whose services would be terminated by March 31 2021.

“Should the financial position of the company improve, the company will consider re-employing retrenched workers in suitable positions, in the event of them remaining unemployed in the first six months after retrenchment, and subject to the recruitment process.”

PetroSA employs 1,295 people on a permanent and a fixed-term contract basis.

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