Property giant Pam Golding Properties will be instituting salary cuts and reduced working hours as the effect of the coronavirus lockdown takes its toll on the company.
Pension fund contributions have also been suspended, and the company has applied for Unemployment Insurance Fund Disaster Relief.
The company, which was started by iconic businesswoman Pam Golding in 1976 and has over 300 offices in Africa, Europe and the Indian Ocean Islands, has suffered a heavy blow as a result of the lockdown period, which means – among other things – that its agents have been unable to trade as usual.
Additionally, the Deeds Office is closed, which means no properties can be transferred.
In an email to staff sent on 2 April and seen by Fin24, chief executive Dr Andrew Golding said that while the company “fully endorsed” the measures instituted by government to contain the spread of the virus, there would be a “significantly detrimental” impact on the property industry in general and Pam Golding Properties in particular.
“In the light of the vast unknown we are facing, I have to consider the long-term health and survival of PGP. I believe that the responsible and prudent thing to do is immediately introduce measures that will protect the financial stability of the business,” Golding wrote.
All new appointments have been frozen, new projects have been halted, rent payments have been negotiated with landlords, and “many other measures” have been put in place, Golding said.
As an alternative to “more drastic” measures – which were not specified – employee salaries would also be impacted, with working hours being reduced by 30% from 1 April and salaries being adjusted correspondingly.
Employees earning less than R10 000 per month would continue to earn their current salaries, however.
These measures would be in place for at least April and May, said Golding.
“I am hopeful that more drastic action will not be required, however, we should prepare ourselves for further measures if the situation does not improve.”
He added that the decision had not been made lightly, but with the belief that the company had “no choice”.
Additionally, the company has approached financial services firm Alexander Forbes for relief, asking to suspend all pension fund contributions – except the risk premium – for the period that salaries will be reduced.
“Furthermore, we will also be applying to access the UIF Disaster Relief fund, whereby you could receive some UIF funding to go towards making up the gap between what you would’ve earned vs. the reduced salary,” the letter reads.
PGP is not the only company to have been hit hard by the coronavirus lockdown. Apart from many small and medium enterprises battling to make ends meet, earlier this week, salary cuts were announced at Independent Media and ANA, while long-standing newspaper Mail & Guardian has expressed concern about its ability to pay salaries.
Major steel producer ArcelorMittal, meanwhile, issued a force majeure and has similarly instituted salary cuts, saying on Friday that it had cut salaries for all its employees. Reuters reported at the weekend that the salary cuts would be effective for a likely period of three months.
Tech company EOH is also reportedly set to cut employee salaries by as much as 20%.