One of the leading businesses in the country, the Pupkewitz Group, said it has decided to offer a voluntary separation to employees as it restructures part of its business due to the Covid-19 fallout. A voluntary layoff is when a worker decides to take a severance package on their own instead of being selected by the company.
“We have commenced the process by giving those staff who would like to voluntarily leave the group the chance to do so by accepting a voluntary separation package. Any voluntary terminations will reduce the number of staff that we need to make redundant. Only a limited number of positions will be made redundant,” the group’s financial director Eugene Shepherd clarified yesterday. Pupkewitz Holdings Chairman Mike Leeming said the turmoil that Covid-19 has unleashed renders the current circumstances unsustainable.
“We deeply regret the impact that letting go of some of our staff is going to have on all of our people and their families during this challenging time in the world and Namibia in particular,” he said in a statement.
Many companies across the globe will not survive the challenges of the current environment. Leeming added some businesses would be restructured to achieve a more sustainably-sized workforce.
The group is involved in various sectors of the economy, including building material, electrical, motor retail, agricultural and catering supply.
“Deciding to restructure has been very difficult, given the responsibility the group feels towards its people, their families and the greater Namibian community. We believe this decision will allow us to serve the greater good by securing the jobs of the vast majority of our 1 860 employees,” said Leeming.
He announced all employees of the Pupkewitz Group have been offered a voluntary separation package with a redundancy process to follow by the end of June. According to him, with Namibia’s economic decline, driven by external factors and intensified dramatically by the global pandemic, their business has felt the effects in a very material way.
The group said it finds itself in a position where more drastic action is required to restore some of their businesses to financial health. The group’s main businesses are exposed to the construction, motor, as well as tourism and hospitality sectors, which have experienced severe downturns over many years and magnified in recent months.
The construction industry has shrunk for 16 consecutive quarters and is estimated to be only 40% of what it was in 2016. According to the group, the motor industry had shrunk to almost a quarter of its size compared to 2016 even before the coronavirus pandemic. In April, only 50 new vehicles were sold in the whole of Namibia and new car sales are unlikely to return to their former heights in the foreseeable future.
“The impact that the poor state of the economy has had on consumers, especially their ability to purchase cars and homes, is notable. As far as the tourism and hospitality industry is concerned, unprecedented difficulties are being faced with tourism having been brought to a virtual standstill as a result of the global pandemic,” Leeming added.
The group said it has negotiated several optional re-skilling courses to be offered free of charge and to assist individuals in transitioning to new income-generating opportunities. Emotional and financial counselling will also be made available to the affected employees.
– anakale@nepc.com.na