By the end of next month, heavy equipment manufacturer Bell Equipment would have retrenched about 1 200 employees in an effort to streamline its business in the face of slowing demand, CEO Gary Bell said on Wednesday.

Bell told Engineering News Online that about 1 200 employees, from an initial number of 3 300, across the company’s global operations would be affected.

Bell noted that the staff complement has so far been reduced by natural attrition over the last nine months, as well as voluntary retrenchment packages. However, he noted that in the final stages of the process, the company would have to implement forced retrenchments. Bell added that the company’s European operations were likely to be affected the most, as that continent was under the most severe pressure.

However, he added that although the aim was to right-size the company to accommodate the declining demand, a number of additional staff members would be retained for when production stabilised, and the economy experienced an upswing.

“We are retaining a lot more people than we need at this time, for that exact reason. And we have also registered people to track them down when things turn up.”

Bell Equipment was currently producing at between 20% and 30% of its total production capacity, depending on a weekly demand basis. The company planned to operate at a level of 50% of the 2008 sales, and has so far reduced the number of employees by 617.

“Not only have we considered the social consequences of the retrenchments, but have taken into account the effect these may have on the very fabric of our business. It is a fine judgment call as to how far the dismissals can go without materially damaging the future of Bell,” Bell chairperson Howard Buttery said in the company’s results for the interim period.

Bell was now awaiting details of the government’s distressed sector programme and possible training time assistance, which could reduce some of the general retrenchments.

South Africa will introduce a training lay-off scheme next month as an alternative to retrenchment for workers and companies affected by the recession.

The government is also considering increased incentives for the manufacture of capital equipment, transport equipment and fabricated metal products, linked to the country’s infrastructure programme.

However, Bell noted on Wednesday that the training lay-off scheme was unlikely to affect workers already axed under Bell’s current resizing programme.