South African Breweries plans 500 job cuts in move to maximize profits

SOUTH AFRICA – South African Breweries, which was bought by Anheuser-Busch (AB) InBev for US$100 million in 2016, is looking to cut 500 jobs, a move it claimed was necessary in light of current economic conditions following around 33 workers having been retrenched by the group last year.

“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.

In a brief interview with Fawu deputy general secretary Mayoyo Mngomezulu, he told Business Report that the move to retrench by the brewer was motivated by its drive to maximise profits and not necessitated by anything else.

“The company is simply looking to please shareholders by declaring higher dividends and we will fight this through the CCMA as well as other processes,” said Mngomezulu. “Job security was part of the conditions put in place by the competition commission during the 2016 merger and now the group want to cut jobs.”

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.

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.

“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,” said Masemola

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 currently employs around 5 700 workers in South Africa.

In other related news, the brewer launched its first electric commercial vehicle at its Chamdor Brewery in Krugersdorp.

Electrification of its fleet is part of ABInBev’s 2025 sustainability goals, which also include the company’s global renewable energy initiative, which will see the company powering all of its plants with 100% renewable energy by 2025.

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