BUSINESS tycoon Lakshmi Niwas Mittal led ArcelorMittal said that it may axe nearly 25 per cent of its workforce in South Africa.
The steel giant’s latest move has come as part of its restructuring plan to reduce cost as it fears that it could fall into red territory this year.
It is anticipated that over 2,000 positions in the African unit of the world’s biggest steel producer may be affected.
Indian origin chief executive LN Mittal led business employs a total workforce of 8,800 in the African country.
The company in a statement on Wednesday (9) said: “Due to the difficult domestic economic environment, the South African steel industry continues to face significant challenges. Certain costs that are not within the company’s control such as high electricity, rail, port, and primary raw material costs have contributed to these challenges.”
The steel firm which fulfils over 70 per cent of South Africa’s steel requirement added: “Headline earnings for the period (are expected) to decrease by at least R650 million ($46m) to a headline loss.”
ArcelorMittal South Africa further noted that in the corresponding year-earlier period it recorded a profit of R54m.
The planned job cuts are expected to put further pressure on South Africa’s economy as it has been facing various economic troubles and near-record unemployment of over 27 per cent.