HWANGE Colliery Company Ltd (HCCL) has laid off 200 workers in order to lower operating costs, businessdigest has established.Company MD Fred Moyo confirmed the development, saying the move would lessen the social services burden on the company, which saw it reporting a US$35 million gross profit for the full year to December 2011 but ended up posting an after tax profit of US$4,4 million.
Moyo said the bulk of the money was eaten up by social services — civil works, schools, hospitals, the nurses’ training school and clubs among other social services the operations company provided.
He said the mining entity would now lease the social services to cut operational costs.
The company has been battling to pay its 3 200 workers on time, resulting in payment of salaries in batches, according to grades and on varying dates.
Hwange is also struggling to raise funding for its operations and at one time sought US$75 million from the Development Bank of South Africa.
The firm is reportedly about to seal an investment deal with the African Development Bank (AfDB), but its high overheads remained a stumbling block.
Moyo explained that the future of a further 700 workers would be determined by the operations of the company.
However, sources at the company told businessdigest that plans were underway to retrench between 700 and 1 000 workers by the end of September as the company scales down operations.
Moyo said the retrenchment exercise was as a result of a recently adopted Enterprise Resource Plan (ERP), which is a computerisation exercise of all departments. The firm started computerisation of the human resources, finance and real estate departments, forcing 200 workers off their jobs.
According to retrenchment letters seen by the Zimbabwe Independent this week, HCCL said those laid off stopped reporting for duty on June 8.
“As you may now be aware, the implementation of the computerisation, re-engineering and restructuring programme supported by the ERP technology has resulted in excess labour to requirements. I advise that you are one the employees who have been declared redundant and excess to the requirements of your department,” reads part of the retrenchment letter written by the human resources manager Fati Mpofu, on June 7.
Mpofu said that the retrenched workers would, however, continue receiving their salaries and benefits for three months without prejudice.
The government controls 37% of the colliery’s issued share capital while Messina Investments, owned by businessman Nick Van Hoogstraten, holds 26%.