‘Black January’: Yet more job losses as Aspen confirms EC retrenchments

Pharmaceutical giant Aspen, Africa’s largest drug maker, has become the latest business to announce that it is retrenching staff. 

The company said on Thursday 23 January that it plans to cut up to 219 jobs at its plants in Port Elizabeth and East London. The facilities manufacture capsules and pills for both the local and international markets.

Business must operate more efficiently

According to a report in The Herald, staff were told that the company had to work more efficiently, more cost-effectively across the value chain, and that automation had been adopted so that Aspen could produce affordable, high-quality medicine on time.

Aspen’s chief operating officer Lorraine Hill is quoted by Business Day as saying the company was working hard to minimise the effects of the retrenchment process.

“This is not something that Aspen takes lightly and is a last resort in a transformation journey that has been transparent and involved employees and their input,” she said.

Staff at Aspen’s affected facilities were issued section 189a notices in December, in line with the Labour Relations Act, which gives management and unions 60 days to find alternatives to job losses.

Company has a heavy debt burden

Aspen has been working to manage its heavy debt burden and as part of this process has been disposing of several non-core assets. In December 2018, its debt stood at around R53 billion, but this has since been reduced to R39 billion, deputy chief executive Gus Attridge announced in September 2019.

At the time, Aspen said it would “assess its operations to ensure its business was relevant to the changing macroeconomic environment”.

“Adapting the business model to align with evolving circumstances has been a key strength of Aspen, moving us from a predominantly generics business to a business based on branded products with a focus on sterile injectables in recent years,” Attridge noted.

A black January for South African jobs

The Aspen announcement of its planned job cuts come at a time when several other South African businesses are also planning to reduce their workforces.

Retailer Massmart announced in mid-January that it had commenced a consultation process in terms of the Labour Relations Act, which could see the closure of 34 stores and affect 1 440 jobs.

Around the same time, Telkom announced the potential retrenchment of approximately 20% of employees – around 3 000 people. It said Section 189 notices were being issued to workers in the company’s Openserve division, as well as its consumer business.