After an initial pull back, Pick n Pay’s share price jumped more than 3 percent by noon on Monday.
The grocery chain expects half year earnings to fall 10-20 percent after a voluntary severance programme saw it cut back 10 percent (or 3,500) of its roles and functions.
CEO Richard Brasher said the move has made the group leaner and more efficient, and expects the payroll saving in the second half of the year to neutralise the retrenchment costs over the full year.
And as companies negotiate a recession-hit economy, given the market reaction to Pick n Pay’s expected results, it seems to be a case of short term pain for long term gain.
