South Africa’s Sun International plans to cut 3,300 jobs in the country and Chile collectively as part of a restructuring plan to survive the pandemic, which took the firm into a half-year headline loss of 885 million rand ($53.26 million) on Monday.
The global hospitality industry, which relies on international travellers and alcohol sale, has been one of the hardest hit by lockdown restrictions imposed to curb the spread of the coronavirus.
Properties of the casino and hotel company were forced to close for over three-months in South Africa, while in the rest of Africa and Latin America, its operations still remain closed.
Ahead of the pandemic, management reviewed employee structures at certain operations as well as the cost base across its South African businesses, the company declares.
The review has resulted in proposed cuts of about 2,300 employees in South Africa, a move that could save up to 280 million rand in employment costs.
The proposed retrenchment exercise will impact the Sun City resort, the Maslow Sandton hotel, the Boardwalk Casino and hotel, The Table Bay hotel and Wild Coast resort, the firm said.
In Chile, Sun International has started a voluntary retrenchment process involving about 1,000 people, with 451 employees to date accepting the offer, the firm said.
The firm has also identified cost savings of more than 250 million rand in outsourcing and service provider contracts, IT systems and other areas.
Consolidated income declined by 56% to 3.7 billion rand in the six months ended June, while earnings before interest, tax, depreciation and amortization plunged by 96% to 79 million rand.
The firm took impairment charges of 1.2 billion rand related to its hotel and resort properties.
Post-lockdown income has started to recover, with its gaming operations achieving 39% of income in July compared with the prior comparative period and 56% during the first 27 trading days of August.