Government will launch a R2,4billion jobs fund next week, which will pay retrenched workers up to 50percent of their salaries for three months.

The fund will finance a "training layoffs scheme" for companies whose profits have dropped because of the recession.

Economic Development Minister Ebrahim Patel said in Parliament yesterday he was "concerned" that many factories were "closing down rather than reducing output".

"What started as a financial crisis has now become a crisis of productive capacity and employment has been hit hard," Patel said.

The fund is the brainchild of government, business and labour, and aims to fight job losses.