Anglo American Platinum to Cut 4,300 Jobs in Restructuring amid Challenging Environment
Anglo American Platinum, a South African precious metals company majority owned by Anglo American, has announced plans to restructure operations due to lower prices, rising costs, and an uncertain outlook. The restructuring could potentially affect more than 4,300 jobs, as well as around 620 service providers and contractors. The final number of job cuts will be decided after the consultation process concludes.
According to the company, revenue for the previous year amounted to ZAR 124.6 billion ($6.60 billion), compared to ZAR 164.1 billion in the prior year. Adjusted earnings before interest, taxes, depreciation, and amortization also dropped significantly, from ZAR 73.9 billion to ZAR 24.4 billion. This decline was primarily attributed to a fall in the prices of palladium and rhodium metals, with the dollar basket price per platinum group metals (PGM) ounce sold dropping from $2,551 to $1,657.
In response to the challenging market conditions, Anglo American Platinum declared a dividend of ZAR 21.30 per share for 2023, a significant decrease from the previous year’s ZAR 115 payout. Chief Executive Craig Miller expressed the need for further intervention to ensure the long-term sustainability and competitive position of the company’s operations.
Anglo American Platinum, which employed over 21,000 people at the end of 2022, had already announced plans in December to reduce production in 2024 as part of efforts to save $1 billion in response to ongoing market volatility. Despite the current difficulties, Miller remains optimistic about the long-term demand for the PGMs the company produces and their role in creating a greener world.
Analyst comment
This news is negative. Anglo American Platinum’s decision to cut 4,300 jobs due to lower prices and rising costs reflects the challenging market conditions. The restructuring is necessary for the company’s long-term sustainability, but it will have a negative impact on the affected employees and service providers. The decline in revenue and adjusted earnings further highlights the difficult market environment. The company’s CEO remains optimistic about long-term demand for their products. The market is likely to react with caution and uncertainty, anticipating potential challenges ahead.
