Ster-Kinekor, South Africa’s largest cinema operator, has issued retrenchment notices to 236 employees as part of a company-wide restructuring initiative.
Ster-Kinekor under scrutiny over mass job cuts
Ster-Kinekor announced the layoffs as a strategy to streamline operations and manage costs in response to persistently low attendance at its movie theatres.
The decision to restructure under Section 189 of the Labour Relations Act was reportedly communicated to all employees, with reasons listed including:
- the severe impact of economic downturns;
- intensified loadshedding; and
- delays in Hollywood content delivery due to industry strikes.
According to the theatre operator, these factors have significantly diminished box office revenues, prompting urgent business adjustments.
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What happened to the post-COVID recovery?
Following the severe blows dealt by the COVID-19 pandemic, Ster-Kinekor entered business rescue proceedings in January 2021.
By November 2022, the cinema chain had emerged from business rescue, bolstered by R250 million in funding from investors Blantyre and Greenpoint Capital.
This financial revival was expected to sustain recovery momentum.
However, despite these efforts and a partial recovery in attendance from pre-pandemic figures, the cinema chain has struggled to return to its former profitability.
The delay in blockbuster releases and continued economic challenges have slowed the pace of recovery, with current cinema attendance just half of what it was before the pandemic.
Is Blantyre sacrificing human labour for profit?
The recent decision to cut jobs has sparked controversy and tension within Ster-Kinekor, particularly concerning the transparency and fairness of the layoffs.
Employees have reportedly expressed concerns over the criteria for job cuts, which encompass various departments including marketing, IT, and operations.
While the company insists that the restructuring is a necessary measure for sustainability and is not solely a cost-cutting move, the unaffected status of top executives has led to perceptions of unfairness among the workforce.
Additionally, despite most cinemas being equipped with generators, the company’s claim that loadshedding has drastically affected operations has been met with scepticism by some employees.
