Group 5 cuts jobs, warns of tough times
Johannesburg - South Africa’s fourth-largest construction firm Group Five slashed 500 jobs in the past five months and has downgraded its 2012 trading outlook, reflecting heavy dependence on the slumping domestic construction market.
Group Five, which employs about 12 000 people, said it retrenched the 500 - including contract workers - since June and could cut more in the coming months, although the numbers were likely to be insignificant.
South African construction companies, once the darlings of investors in the building boom leading up to the 2010 Soccer World Cup, have been plunged into oblivion as they struggle to find replacement work elsewhere.
Group Five CEO Mike Upton said although the group wanted to have “a firm home base”, it had plans in place to ensure its order book is split 60:40 South Africa work and cross-border work, respectively.
Group Five’s R9bn worth of secured work as of October is heavily weighted in favour of South Africa at 66% and the rest from neighbouring southern Africa countries, the Middle East and Central and West Africa, it said.
The company, which operates in 22 countries outside South Africa, said it was bidding for work in countries that include Qatar, Nigeria, the Democratic Republic of Congo, Poland and Bulgaria.
Upton said the company has identified R138bn worth of new work that it could bid for, 10% of which it has been selected for as a preferred bidder. The potential job is made up of R57bn offshore and R81bn domestic.