Ellies announces staff retrenchments

Electronics importer and distributor Ellies has informed shareholders that it will be restructuring “certain operational functions” within the company.

“This is pursuant to ongoing constrained trading conditions being experienced by the Group,” Ellies stated.

It has begun formal consultations in terms of Section 189A of the Labour Relations Act.

“As part of the S189 process, the Company and affected stakeholders will together consider appropriate measures to minimise possible retrenchments and seek viable alternatives which will assist the Group in returning to profitability and ensure the continued operation of Ellies,” it said.

“The Company is committed to following the legislative processes to ensure that all affected employees are treated fairly.”

Ellies’ restructuring comes amid record levels of rotational power cuts in South Africa that should have seen the company selling its inverter trollies and cube power stations hand over fist.

However, Daily Investor reported that a conservative commercial model and poor marketing had hamstrung the company.

Ellies is a household name in South Africa, and its backup power systems could have been the default option for guarding against load-shedding.

Unfortunately, Ellies has done virtually no marketing, opening the door to much smaller companies to capture significant market share.

Ellies products have also frequently been out of stock, suggesting a too-conservative commercial model, with the company not keeping enough stock in-country to better satisfy demand.

The retrenchments also come after Ellies dismissed eight employees at the end of July for refusing to be vaccinated against Covid-19.

The company has dismissed speculation that it was seeking reasons to dismiss staff or that its vaccination policy was connected to Standard Bank increasing its loan facilities.

Now read: Ellies blunder that cost it millions

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Ellies announces staff retrenchments