Movie exhibitor Ster Kinekor will be laying off 236 employees two years after exiting business rescue. Picture: Dumisani Sibeko
Ster Kinekor has announced that they will be laying off 236 employees and shutting down at least nine cinemas in South Africa.
This is two years after the movie exhibitor exited business rescue.
A statement from the employees of Ster Kinekor said that the company, which is now managed by UK-based Blantyre Capital Ltd and Greenpoint Capital Pty Ltd, had declared plans to engage in the Section 189(3) process after issuing a notice to make 236 primarily previously disadvantaged employees redundant.
The top executives of the company will not be affected.
The departments that the layoffs will impact include staff in the chief executive officer's office, marketing, sales, human capital, information technology, business operations, content, finance, head office, regional operations, and cinemas.
The company’s employees said that despite claiming power interruptions as a main reason for the layoffs, 75% of cinemas have generators, and CEO Mark Sardi said last year that the company considers the effects of power shortages on its operations to be temporary.
According to Ster Kinekor employees, the other factor that the company citied as a factor for the anticipated retrenchments is the Hollywood strikes.
The company said to employees: “In recent months, the business has suffered a significant decline in attendances.”
The company said that the strike is largely as a result of a challenging economic environment, prolonged and more intense load shedding as well as the impact of the Hollywood strike.
“As these are forces largely out of the business’s control and the financial impact is likely to endure for some time, Ster-Kinekor Theatres has had to review its cost structure to ensure the continued survival and sustainability of its business,” Ster Kinekor said.
According to a Ster Kinekor report, the company will be closing down nine cinemas: three in KwaZulu-Natal, five in Gauteng and one in the Western Cape while a couple of other cinemas are under review.
In 2022, Blantyre Capital and Greenpoint Capital took control of Ster Kinekor with a R250 million senior secured debt facility to fund future operations, facilitate the exit of business rescue and refinance the existing capital structure.
According to the company’s employees, one of the condition by the Competition Commission was “the merging parties shall not retrench any employees as a result of the merger for a period of 36 months from the implementation date.”
Ster Kinekor employees said that merger-specific layoffs would be in breach of the conditions.
“We believe that regardless of whether the merging parties violate the aforementioned employment condition, the job losses may effectively mean that the company is in fact unable to comply with many of the other conditions, which would need to be reconsidered, amended, and re-agreed upon by the company with the commission,” the employees said.
Employees said that they require the following information:
– When did Ster Kinekor management initially mention layoffs and cinema closures?
– What is the breakdown of skilled and unskilled personnel planned for retrenchment?
– What is the race breakdown of the personnel proposed for retrenchment?
“Finally, what is the gender breakdown of the employees proposed for retrenchment? Why are there no retrenchments at the highest management level?
“Also, do executive and non-executive directors receive fees for their board positions, and if so, will those amounts be reduced?”
IOL Business