Mining giant Anglo American has commenced job cuts at its corporate and head office in South Africa, reported Reuters.

The move forms part of the company’s wider plan to axe jobs in several countries in response to lower demand for the commodities it mines due to the weakening global economy, reported Bloomberg News.

Anglo American has selected its South African iron ore unit, Kumba Iron Ore, to start with the planned jobs cuts.

A spokesperson was quoted by Reuters as saying: “We expect a potential reduction in corporate office roles across a number of countries.”

National Union of Mineworkers spokesperson Livhuwani Mammburu earlier told Reuters that Anglo planned to cut 183 jobs at Kumba Iron Ore, mostly at its head office, in the wake of challenges in moving sufficient volumes to ports as a result of the country’s rail constraints.

Anglo American’s ability to export iron ore has been severely restricted due to frequent delays on the rail route, which is run by Transnet.

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Referring to state-owned logistics company Transnet, Mammburu said: “Kumba said it is embarking on a restructuring and the main reasons they are giving is they are not able to transport more iron ore to the port due to the problems with Transnet.”

Anglo American has now commenced 60-day negotiations with the affected employees in South Africa, as per the labour law requirement.

In a letter to employees, the company said: “As we progress through 2023, market conditions have weakened and we are still not meeting many of our internal performance targets, creating greater urgency for achieving organisational effectiveness and to reduce our business support costs.”

In the letter, the company said the decision to reduce head count is part of its plan to simplify its structure. However, the company anticipates “very little impact on its operations”.

The company said in the notice: “There has also been a significant increase in roles and associated costs in the corporate centre and the business head offices over recent years, leading to an increase in initiatives.

“This is part of the reason for the poor effectiveness and operational performance that we have seen.”

The mining company, which earlier this year split its business into two regional divisions, initiated reorganising its operations in May 2023, a spokesperson told Reuters.