Ellies Electronics, the maker of electrical cables and plugs, is considering cutting a fifth of its workforce, it says, citing financial losses that underline a slump in the manufacturing sector.
Ellies, which has 872 people on its payroll as of the last financial year and is a division of JSE-listed group Ellies Holdings, is the latest manufacturer to feel the pinch of an economy that has hardly grown over the past 10 years.
Business conditions in the manufacturing sector fell for the fourth month in a row, reaching their lowest levels since 2009, according to Absa purchasing managers’ index released on Monday, hours before Ellies said it would begin talks with unions about the layoffs. Ellies, which also makes security alarms, intercoms and floodlights, said weak demand in the local market forced it into re-examining its organisational structure, leading it to consider laying off workers to fit its revamped structure.
“This is about ensuring the long-term sustainability of the Ellies business and improving our competitive position,” CEO Shaun Prithivirajh said. The restructuring, which would affect 183 jobs, would allow the company to focus on its core business of procurement and sale of electronic products.
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