South Africa’s insolvent national arms company is seeking to fire about 13% of its workers in a bid to survive after the government spurned its plea for a bailout.
Denel SOC Ltd, whose predecessor was established to bypass sanctions against the apartheid regime, has told 379 workers in its artillery, ammunition and armoured-car divisions that they could lose their jobs, according to Helgard Cronje, a representative of labour union Solidarity.
The so-called section 189 notice sent to the employees is a legal step needed before cuts can take place.
While idled national airline, South African Airways, was allocated R10.5 billion ($683 million) in last month’s interim budget, other struggling state companies including Denel were not helped.
South Africa’s revenue has been sapped by the coronavirus outbreak and recurrent bailouts for state companies that were plagued by mismanagement and corruption during the nine-year rule of President Jacob Zuma who was ousted in 2018.
“Consultations between Denel management, labor and employee representatives have started,” said Denel in an e-mailed response to questions. “The company is considering rationalizing some positions.”
The Pretoria-based company currently has a workforce of 2951 people including contractors and students, it said.