1,440 people to become jobless as S.Africa company plans closure

A total of 1,440 jobs could be lost as South Africa's Massmart Holdings plan to shut down some stores as it struggles to grow sales in a tough economy.

According to Reuters, Massmart swung to its first half-year trading loss in two decades last August, as low growth, high unemployment and a rising cost of living hurt South Africans’ spending power.

The retailer said in a statement it had started consultations with unions and other stakeholders around the closure of up to 34 stores, following a review that identified a number of outlets that were underperforming.

“A total of 34 Dion-Wired and Masscash stores and approximately 1 440 employees are potentially affected by this process,” it said.

Dion-Wired is Massmart’s electronics and appliances subsidiary, while Masscash is its wholesale division including cash and carry, food and cosmetics outlets.

Massmart is largely owned by U.S. retail giant, Walmart.

Reuters also revealed that, like Massmart, fellow competitor, Shoprite, are also struggling in the difficult market conditions, and as well battled currency weakness elsewhere in Africa, especially Zimbabwe and Nigeria.