Pioneer Foods to retrench over 1,000

Pioneer Foods is to retrench more than 1,200 employees from senior and middle management.

Food giant Pioneer Foods is expected to retrench 10 percent of its more than 1,200 senior management.

CAPE TOWN - Multinational food production giant, Pioneer Foods, will be retrenching more than 1,000 employees.

The food giant has four divisions that manufacture household food and beverages under the Bokomo, Sasko, Quantum and Ceres brands.

More than 1,200 of the company's top earners will be put on early retirement, retrenched or re-deployed to vacant positions for a lower salary.

Newly appointed Pioneer Foods CEO Phil Roux told Eyewitness News he will not be able to verbally answer retrenchment questions as the company is in a closed period ahead of the release of its financials.

But in a written statement, it was confirmed 10 percent of the more than 12,000 employees have to go.

The restructuring and transformational business model changes mean more than 1,200 senior and skilled people may soon be without jobs.

Most of those affected are employed at the food giant's Paarl head office.

There's also speculation the Boland head office may be relocating.

ECONOMIC STRESS

Pioneer Foods says reducing its wage bill by restructuring is the only way to expand its profit margins.

In a written statement sent to Eyewitness News the food giant says it's consolidating its business units and balancing its resources.

Roux has started the consultation process to trim costs.

He has been quoted as saying he is responsible for running Pioneer Foods as leanly and efficiently as possible on behalf of all his stakeholders.

At the same time the South African Chamber of Commerce and Industry (SACCI) says several top companies have embarked on retrenchment drives in a bid to save their bottom lines.

Eyewitness News learnt two months ago that retail giant Pick 'n Pay is shedding 400 jobs at its Cape Town and Johannesburg head offices.

SACCI's CEO Neren Rau said there were more retrenchments to come.

"We're also aware of a number of other companies that are also retrenching at senior levels within our membership. This is a sign of the enormous pressure the challenging economic environment is placing on business."

Rau says several top South African companies are battling to survive in the wake of the global recession.

"I don't believe there is sufficient appreciation of the economic stress that businesses are under. We're now seeing signs of larger companies cave in to these pressures, whereas small and medium enterprises have had to deal with these pressures for a couple of years now, at least."

While the official unemployment rate is pegged at 25 percent, Rau says itRaus definitely between 30 and 40 percent.