Barloworld to cut over 2 500 jobs

Barloworld Group CEO Dominic Sewela confirmed the group will be exiting the logistics business and has put the automotive business “under business review”.

Sewela said the objective of the retrenchments is to realise a saving of between R700 million and R720 million, before implementation costs, for Barloworld’s 2020 financial year.

Implementation costs in the year are estimated at between R270 million to R300 million.

The planned job cuts by Barloworld follow Motus, the vehicle business of Imperial Holdings that was unbundled and separately listed on the JSE, last month reporting it is in the process of reducing the size of its workforce by about 2 000 people through an early retirement and retrenchment process because of the impact of Covid-19.

JSE-listed Combined Motor Holdings (CMH) last month said its staff complement has been reduced by 15% and a further 15%20% reduction is anticipated over the coming months.

Sewela said Barloworld will be putting processes in place to find a way of ensuring it realises value for the logistics business “given the fact that we have spent time fixing this business”.

He said putting the automotive business under business review means they will be looking at alternatives.

Sewela said it has been a very difficult and challenging environment, not only from a business point of view but at a personal level and the impact on the staff psychologically. “Covid-19 has put into sharp focus issues of sustainability,” he said.

Sewela added the challenging trading conditions experienced prior to Covid-19 are expected to intensify in the second half of the group’s financial year but Barloworld is well positioned to withstand these challenges.

Barloworld automotive and logistics CEO Kamogelo Mmutlana said “well in excess of 2 500 positions” will be affected overall in the automotive and logistics division because of retrenchments.

“In Avis and Budget Rent a Car, we are targeting between 50% and 60% of the total employee base.

“We are currently in consultation with our various unions.

“In terms of motor retail, we are targeting 30% of the employee base and in logistics roughly another 30% cut.”