The latest company to announce retrenchments is Coca-Cola, making it the third company to cut jobs in the Eastern Cape in the past three months.
The Select Committee on Economic Development and Trade has called on the government to step in as company closures trigger a domino effect of retrenchments.
The latest company to announce retrenchments is Coca-Cola, making it the third company to cut jobs in the Eastern Cape in the past three months.
Sonja Boshoff, Chairperson of the committee, said the pending job cuts pose a threat to the livelihoods of thousands of South Africans.
“Unless urgent and coordinated action is taken, the damage to our economy, communities, and industrial base will be irreversible. The stakes are high, and these job losses will push families into greater precarity, further eroding trust in our economic stability.”
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Coca-Cola shuts down in two provinces
The beverage giant plans to close down its plants in Bloemfontein, Free State and East London, Eastern Cape, resulting in the retrenchment of at least 680 employees.
“This announcement comes at a time when a number of companies have already reduced operations, resulting in widespread job losses,” said Boshoff.
Coca-Cola will be the third major company to retrench employees in the Eastern Cape since June this year.
Tyre giant Goodyear closed down its plant in Nelson Mandela Bay in June, affecting 900 employees.
Meanwhile, Ford Motor Company Southern Africa retrenched 470 of its employees. 391 workers at the Silverton assembly plant in Pretoria, 73 workers at the Struandale engine plant in Gqeberha and a further 10 administrative staff.
Coca-Cola restructures
She added that regions such as the Eastern Cape, Bloemfontein, East London, Newcastle, Vanderbijlpark, and others are already vulnerable, and these retrenchments will only amplify socio-economic stress.
Boshoff highlighted that Coca-Cola plans to conduct the retrenchments through the restructuring of the company.
“It is deeply concerning, given South Africa’s stagnant economy and the country’s already exponential unemployment levels,” she added.
“It concerns the committee that small businesses, suppliers, service providers, and the informal sector are being thrown into uncertainty by these ripple effects.”
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Talks with CCMA
It is understood that the affected workers held a consultation meeting on Friday with the company’s management and representatives from the Commission for Conciliation, Mediation and Arbitration (CCMA).
Dominique Swartz, a Food and Allied Workers Union (Fawu) spokesperson, told The Citizen that they cannot provide an update on the matter at the moment.
David van Vuuren, the DA’s economic development spokesperson in the Free State Legislature, said the closure of the Bloemfontein plant will have ripple effects on the local economy.
“When large businesses close or alter their operations, the impact is usually felt immediately by the surrounding community. In some cases, the spin-off effects can be as devastating as the closure of the company.”
Unemployment
He highlighted that the Free State has the third-highest unemployment rate in the country, and the issues of job security and creating further employment in the province are the number one concern.
“We want to see the government doing more to protect businesses of all scales and ensure the protection of our economy.”
Boshoff said the automotive industry has experienced more than 4,000 job losses over the past two years, as 12 companies in the sector have been forced to close their doors.
“These figures underscore the urgent need for the government to arrest the industrial decline in South Africa by making the right market choices and investing in clean energy and a stable power supply.”
Warning to Eastern Cape
She urged government to convene an emergency multi-stakeholder summit with affected companies, labour unions, and provincial governments to develop concrete interventions that protect jobs, stabilise industries, and restore investor confidence.
This comes days after the CEO of the National Association of Automobile Manufacturers of South Africa (Naamsa) warned that the Eastern Cape will soon become a ghost town due to job cuts and company closures.
Mikel Mabasa was discussing the potential impact of the 30% US tariffs on the automotive industry if alternatives are not implemented. He said Mercedes-Benz will feel the pinch of the high tariffs.
Mercedes-Benz manufactures its C-Class model in East London and exports some of these to the US.
Mabasa said the brand plays a significant role in the Eastern Cape’s economy, not forgetting its role in employing people in the province.
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