Anglo American Platinum (Amplats) has announced a restructuring proposal that could potentially impact 3,700 jobs across its South African operations.

The decision comes in response to a significant reduction in profits, driven by falling metal prices and exacerbated by ongoing macroeconomic pressures.

The company emphasised the need to strengthen its competitive position and ensure long-term sustainability.

Initiated under Section 189A of the South African Labour Relations Act, the restructuring process will involve consultations with stakeholders including trade unions and non-unionised employees.

The final number of affected jobs will only be determined after these consultations, the company said.

Alongside the potential lay-offs, which will affect nearly 17% of the workforce, the company is also reviewing contracts with 620 service providers.

For full-year 2023, Amplats’ profit plunged 73% to R13bn ($688m) from R49.2bn in 2022.

The company also cut its dividend by 81% to R21.30 per share.

Total net revenues for 2023 dropped 24% to R124.58bn compared with R164.09bn in the prior year.

Amplats CEO Craig Miller said: “We have worked hard to address aspects in our business that are impacted by both the global and local challenges currently facing the PGM [Platinum Group Metals] industry and have already implemented several key cost-saving initiatives.

“However, given the market outlook and protracted low-price environment due to structural changes in our markets, further measures are required to build the resilience that will sustain this business. It is important to understand that this has been a decision taken as a last resort for the company.

“These actions are necessary to continue the employ of thousands of workers and contractors who will continue to add value for our stakeholders – through salaries, taxes and royalties, as well as procurement of goods and services from local suppliers.”