PG retrenches workers

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Loss-making PG Merchandising (PGM) has retrenched part of its workforce citing high costs and overstaffing.

Sources said management at the company has since indicated retrenchment packages would be paid over 24 months.

According to one of the letters written to employees, the PGM board approved recommendation by management to retrench all members of staff whose positions have been abolished following restructuring.

“The group has been on an ongoing remodelling and restructuring exercise since 2009 in an effort to turnaround the business and become profitable,” reads part of the letter.

“This retrenchment exercise has been prompted by the following reasons: PG Merchandising has been experiencing poor financial performance since the introduction of the multi-currency system in Zimbabwe. Business has been unable to grow to profitable levels despite recapitalisation by shares.”

Contacted for comment PG Industries director Raymond Chipangura confirmed the retrenchment exercise but said “nothing has been finalised yet”.

It could not be immediately established how many employees would be retrenched.

PG has closed 15 branches in the last 12 months and in the process merged its subsidiaries PGBS and DST.

The company said the cost structures of the group had remained high, more so property and people costs. It said management had re-looked at its reporting structures and staffing levels in PGM, which includes PGBS and DST together with current production and sales figures.

“The company continues to report losses. New structures have been put in place and positions, which were excess to requirements were identified following this exercise.

“In general the company is overstaffed hence the decision to abolish some posts and retrench affected staff. “Please be advised that the position of . . . which you currently hold is being made redundant effective January 1 2012 and you will be retrenched with effect from that date. “

The company will not recruit a replacement for this position. You are required to proceed on paid leave from January 1 2012 pending our application for approval to retrench with the Retrenchment Board.”

Employees said they were not against the retrenchment exercise, but all they wanted was to get their retrenchment packages in full so they could move on with their lives.

PG is offering workers gratuity equivalent to two weeks’ salary for every year served, severance pay equivalent to a month’s salary and relocation pay equivalent to a weeks’ wages.

This will be in addition to cash in lieu of notice of three months’ pay, cash in lieu of any leave due and pension.