July 30, 2020 / 12:12 PM / 14 days ago

Diamond giant De Beers likely to cut jobs after COVID-19 hit

LONDON/GABORONE (Reuters) - Diamond mining giant De Beers is likely to have to cut jobs, its chief executive said on Thursday, as it outlined plans for an overhaul of its business after the coronavirus hit jewellery demand.

FILE PHOTO: A truck drives amongst workings at the De Beers Voorspoed Diamond mine near Kroonstad, South Africa May 3, 2017. REUTERS/James Oatway/File Photo

De Beers, a unit of Anglo American (AAL.L), earlier reported plunging earnings in the first half of 2020 as a drop in rough diamond sales and prices hurt margins.

Underlying earnings before interest, tax, depreciation and amortization (EBITDA) were just $2 million in the period, down from $518 million in the first half of last year.

De Beers CEO Bruce Cleaver told Reuters official consultations with workers will begin on Aug. 11. He said the business overhaul “is likely to lead to some job losses, but I can’t tell you at this point what that number will be”.

Cleaver said the process would last for three months and involve a review of mining, rough sales, retail and the corporate centre, but exclude joint venture businesses in Botswana and Namibia which have different governance structures.

De Beers employs 20,000 people across its entire business.

The country’s coronavirus state of emergency, which ends in October, prohibits businesses from laying off workers.

Asked whether De Beers was planning job cuts in Botswana, executive vice president for diamond trading Paul Rowley said that as the transformation plan was a work in progress, he couldn’t take anything off the table.

South Africa’s National Union of Mineworkers did not immediately reply to a request for comment on possible job cuts by De Beers.

Maintaining that the long-term outlook is positive, however, the miner said its business transformation plan aims to boost margins by, among other things, modernising the way it sells diamonds.

(This story corrects paragraph 8 to change last name to Rowley from Rawley, changes to couldn’t from could)

Reporting by Zandi Shabalala in London and Brian Benza in Gaborone; Additional Reporting by Tanisha Heiberg in Johannesburg; Writing by Helen Reid; Editing by Jan Harvey and David Evans

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