Ster Kinekor, under the new management of UK-based Blantyre Capital Ltd and Greenpoint Capital Pty Ltd, has revealed distressing news for its workforce. The cinema giant is set to lay off 236 employees and will cease operations at nine of its locations across South Africa.
The company, which has long been a staple in South African entertainment, is initiating the Section 189(3) process, an unfortunate step that involves making numerous previously disadvantaged employees redundant.
Impact Across the Board
The layoffs will affect a broad spectrum of the company’s departments, from the Chief Executive Officer’s office to marketing, sales, human capital, information technology, business operations, content, finance, head office, regional operations, and the cinemas themselves. Notably, the company’s top executives will remain unaffected by these changes.
Reasons Behind the Restructuring
Ster Kinekor’s employees have pointed out that, despite assertions that load shedding is a primary cause for the downsizing, a significant portion of their cinemas are equipped to handle power outages. In fact,
75% of cinemas have generators,
and CEO Mark Sardi had previously indicated that the effects of power shortages were expected to be only temporary.
Another cited reason for the cuts is the ongoing Hollywood strikes, which have exacerbated the challenges faced by the company. Ster Kinekor conveyed to its staff that the recent times have seen a
“significant decline in attendances,”
largely due to the economic downturn, intensified load shedding, and the Hollywood strike.
The company stated,
“Ster-Kinekor Theatres has had to review its cost structure to ensure the continued survival and sustainability of its business,”
highlighting the dire need for these drastic measures.
Ster-Kinekor Cinema Closures
The closure will see three cinemas in KwaZulu-Natal, five in Gauteng, and one in the Western Cape being shut down, with additional locations currently under review. This decision marks a significant contraction in Ster Kinekor’s operations, impacting not only the employees but also the film-going culture in these regions.
The restructuring efforts by Ster Kinekor reflect the broader struggles within the entertainment industry, particularly in facing the dual challenges of economic pressures and external disruptions like strikes. The company’s focus remains on navigating these tumultuous times with hopes for eventual stabilization and recovery.
