Group Five lays off employees in a bid to revamp the firm
Mid last week construction company Group Five said it had cut jobs and split up its loss-making engineering and construction division as part of a restructuring. The company, which operates in 12 countries in Africa and Europe, failed to give further details on the job cuts and said additional guidance would be provided once the process had been completed.
In its 2016 annual report, Group Five said its employees in the Southern Africa region were about 7,470 and 1,145 in the rest of Africa. The move seems to be influenced by the slowing down of South Africa’s construction industry since the 2010 FIFA World Cup.
Group Five said its restructuring, supported by Deloitte Consulting, led to the implementation of voluntary and forced retrenchments that are set to conclude at the end of June.
The company, which makes 81.2% of its group revenue from the engineering and construction division, said that business had now been split into Construction: South Africa, Construction: Rest of Africa and Engineer, Procure and Construct. In a statement released by the company, the changes made are aimed at unlocking shareholder value and addressing the loss-making Engineering and Construction cluster.
The impact of the retrenchments will be included within the company’s results for the second half of 2017.
Group Five recorded its first six-month loss in 11 years in February due to a $19m settlement with the country’s government.
The company said the process of appointing a permanent chief executive was well underway after it appointed Themba Mosai as interim CEO to replace Eric Vemer who left in February after over two years at the helm.