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CORRECTED-UPDATE 2-Diamond giant De Beers likely to cut jobs after COVID-19 hit

Thu, 30th Jul 2020 13:54

(In paragraph 8, corrects last name to Rowley from Rawley,
changes to couldn't from could)

LONDON/GABORONE, July 30 (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.

De Beers, a unit of Anglo American, 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.

(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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