Job cuts expected at South African Breweries

Yet another major corporate – AB InBev’s South African Breweries (SAB) unit – is looking at cutting jobs, in the face of tough economic conditions in the country.

Moneyweb has learnt that between 300 and 500 jobs could be on the line at SAB, after being alerted by worried workers who received Section 189 letters on January 31, proposing termination of their employment.

“Many of us have received letters saying our jobs could be cut and this has caused panic and confusion, especially for those who have been working at SAB for years,” said one worker on condition of anonymity.

The move has not only surprised workers but the Food and Allied Workers Union (Fawu), which noted that SAB agreed not to embark on mass retrenchments for five year after its former parent company SABMiller merged to become part of Belgian-based global brewing giant AB InBev in 2016.

Fawu Deputy General Secretary Mayoyo Mngomezulu tells Moneyweb that the union is set to thrash out the matter at the Commission for Conciliation, Mediation and Arbitration (CCMA) on Wednesday.

“This is just not on and we are going to fight this move by SAB…. We have no doubt that the planned retrenchments are in some way linked to the 2016 merger and that the group’s foreign owners want to cut jobs in order to maximise profits.”

Mngomezulu noted some 500 SAB workers had received notices of the planned retrenchments at the end of January, which follows around 33 workers having been retrenched by the group last year.

“We will have to hear what they say at the CCMA, but we are not taking this lightly…. SAB currently employs around 5 700 workers in SA, which means if they eventually cut 500 jobs that’s about 8% of the group’s workforce in the country. We can’t afford any more job cuts both as a sector and as a country,” he said.

SAB spokesperson Refilwe Masemola confirmed to Moneyweb that the group is looking at cutting staff. However, she insisted that the move is not “merge-related” and instead linked to the operating environment.

“SAB confirms that it is currently in the process of reviewing its business operations, in light of the prevailing economic conditions in South Africa. The review, which is in line with the October 2016 merger conditions, will affect only a small minority of its workforce in specific areas and not across the business as a whole,” Masemola said in an emailed statement.

“2020 marks SAB’s 125th anniversary, and the company remains committed to its long-term prospects in South Africa. Businesses need to constantly adapt to change to maintain efficient, sustainable and competitive organisations. In doing so, SAB will at the same time, implement actions to identify growth opportunities that could create future employment prospects, thereby enabling SAB to return to its current level of employment,” she added.

SAB confirmed that it has applied for the Section 189A process, which will be facilitated by the CCMA, in consultation with Fawu. However, the group did not give any further detail on how many workers had been given the letters proposing termination of employment, or on ultimately how many workers will be affected by the retrenchment plans.

Meanwhile, Mngomezulu said Fawu would be consulting its lawyers following the meeting with SAB’s management at the CCMA on Wednesday.

“We are going to get legal opinion based on what SAB say at the meeting…. The food and allied sector have already lost too many jobs in the last year. Other companies like Tongaat Hulett and RCL, as well as unlisted groups such as Illovo Sugar, have been cutting jobs that run into several thousand. Many are not done and retrenchments are continuing,” he said.

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