Iqbal Survé-linked AYO Technology said on Tuesday it had initiated a Section 189 process, or retrenchment talks, as it looks to cut costs and meet a strategic goal of becoming an investment holding company.
The firm had warned of possible job losses in April 2021 when it announced a series of plans to respond to the closure of its banking facilities, including transitioning to an investment holding company, which will help reduce costs.
SA banks have moved to cut ties with Survé-linked firms following the release of the report of the Mpati Commission of Inquiry in March 2020, which concluded that the R4.3 billion investment by the Public Investment Corporation (PIC) into AYO upon its listing in 2017 demonstrated malfeasance and impropriety. The PIC has instituted legal proceedings to recoup the investment, while the firm has also been struggling with loss of contracts, including Sasol.
AYO had 1 038 employees as of the end of its 2022 year, when it spent R422 million on salaries. The firm said on Tuesday it was committed to following due process to ensure employees are treated fairly.
AYO said in its 2022 annual report the banking challenges had forced it to adopt various measures, including paying salaries months in advance, while prolonged litigation and negative media coverage had led to “emotional fatigue” among staff, and was making attracting high-calibre staff challenging and costly.
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