Ster-Kinekor Set To Lay Off 236 Employees
Ster-Kinekor Set To Lay Off 236 Employees. South African cinema company, Ster-Kinekor has announced plans to lay off 236 employees and close 9 cinemas in a restructuring effort in the face of declining attendance numbers.
The company served its staff with a section 189(3) notice to begin the retrenchment of 236 of Ster-Kinekor’s employees. The company says that the challenging economic environment, load-shedding, and the impact of the Hollywood strikes is what ultimately led to the closure of the cinemas and the retrenchments. The company seeks to close cinemas such as the Boardwalk, Mimosa, and Shelly Beach cinemas in KZN and in Gauteng, it will close Cedar Square, Maponya, Matlosana, Southgate, and Sterland.
“This is largely as a result of a challenging economic environment, prolonged and more intense load-shedding, as well as the impact of the Hollywood actors’ and writers’ strikes, where content scheduled for release in 2023 and 2024 has been moved out to 2025,” Ster-Kinekor says. The positions that will be affected include human capital, business operations, content, finance, head office, regional operations, and information technology.
Ster-Kinekor entered voluntary business rescue proceedings in January 2021. The decision was made due to the severe impact of the Covid-19 pandemic and the subsequent economic lockdown measures. Before the pandemic, Ster-Kinekor was profitable, but the closure of cinemas and ongoing restrictions, including curfews and limited seating capacities, led to significant financial losses for the company.
The company successfully exited business rescue in November 2022. The process involved raising R250 million from UK-based asset manager Blantyre Capital and South African asset manager Greenpoint Capital. The injection, alongside a positive trend in cinema attendance, allowed Ster-Kinekor to complete the business rescue process and save around 800 jobs.
Even with successful business rescue efforts the company could not survive the current decline trend of cinemas. With the ongoing loadshedding, issues in the film industry and how people prefer to stream their content these days, the company might still face similar challenges in the future.
