Companies must emulate Meikles

HARARE - While the decision by Thomas Meikles Stores to lay off about 150 workers countrywide was naturally met with resistance, their decision to pay packages upfront is highly commendable given that most companies which are retrenching have failed to pay off their workers.

Zimbabwe is faced with an unprecedented wave of company closures and job losses resulting from an economic meltdown blamed on the ruling Zanu PF which seems clueless on how to turn around the economy.

To survive in this tough market, most companies have had to restructure and one of the best ways to make it in such an environment is to cut costs on the wage bill and which is one of the biggest overheads in any company.

Ninety percent of the companies that are still operating have had to streamline  in order to survive the man-made meltdown and it came as no surprise when Meikles laid off 150 workers at a cost of $600 000.

When workers are retrenched, they are traumatised in a massive way and they need to be immediately compensated and this is why we applaud Meikles for making sure this sensitive area is taken care of.

Yes, protests and complaints will be anticipated but this is the only way for companies to survive in an environment poisoned by Zanu PF’s failed policies.

Companies should always anticipate that at some point they will streamline and so have to budget for that well in advance.

In the same vein,  we would also want to urge government to also implement advice from the International Monetary Fund (IMF) to retrench civil servants or at least pay them from home.

This will help ease pressure on the Treasury and ultimately reduce burden on the people who are being haunted by the Zimbabwe Revenue Authority (Zimra) who are desperate to collect taxes to meet demands for civil servants’ wages.

Most companies in the country have been on a restructuring exercise since the introduction of the multiple currency system in 2009 due to the harsh economic environment as evidenced by low aggregate demand and negative inflation.

The gloomy situation is forcing many companies to either scale down operations or completely shut down as there seems to be no light at the end of the country’s anaemic economic crisis.

The National Social Security Authority recently estimated that more than 700 companies officially closed while over 10 000 jobs were lost between 2011 and 2014, further affecting disposable incomes and demand.

Struggling companies are in sectors such as the motor industry, tourism, agriculture, security, furniture, mining, cement, engineering and timber.

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