BY: LETHABO MATHOLE
Ster-Kinekor plans to retrench 236 employees and shut down as many as nine cinema complexes across South Africa, attributing the decision to a significant drop in cinema attendance.
In a statement on Tuesday (16 April), the company said it had issued a Section 189(3) notice to staff. It currently has a workforce of 728 employees. The rise of online video streaming services, diminishing movie audiences and a challenging economy have had a negative impact on movie distribution companies.
Ster-Kinekor recently announced that it was undergoing a restructuring process, including the gradual closure of some movie theatres and job cuts.
The cinema group said all staff members had been issued with notices informing them of the company’s intention to proceed with a restructuring exercise under Section 189 of the Labour Relations Act.
“As these are forces largely out of the business’s control and the financial impact is likely to endure for some time, Ster-Kinekor Theatres has had to review its cost structure to ensure the continued survival and sustainability of its business,” the company said.
Ster-Kinekor said factors like the challenging economic environment, load-shedding, and the impact of the Hollywood strikes had resulted in substantially lower cinema attendance.
The Competition Commission reportedly directed the merging parties not to retrench any employees as a result of the merger for a period of 36 months from the date of implementation of the transaction.
“We believe that regardless of whether the merging parties violate the aforementioned employment condition, the job losses may effectively mean that the company is in fact unable to comply with many of the other conditions, which would need to be reconsidered, amended, and re-agreed upon by the company with the commission,” wrote representatives of the affected employees in a statement.
Ster-Kinekor yesterday said it was “committed to complying with all the legal requirements”, adding that it would also “ensure that employees are kept abreast of all developments throughout the Section 189 process” as it progresses.
Entertainment commentator Phil Mphela posted this announcement on X (previously known as Twitter), where he announced that the nine cinemas that would close nationwide would include, Bayside (WC), Boardwalk (KZN), Mimosa (KZN), Shelly Beach (KZN), Cedar Square (GP), Maponya (GP), Matlosana (GP), Southgate (GP) and Sterland (GP). Many users were saddened by this news shared their comments on X (twitter), read some of the comments below:
