Debswana Diamond Mining Company has laid off at least 500 workers as part of an ongoing cost-cutting plan amid persistent challenging conditions in the diamond market.
Subdued market conditions have stifled demand for rough diamonds, with sightholders unable to take up part of their allocations in the previous sales year.
The company sells 70 percent of its output to De Beers, while 30 percent goes to the state-owned Okavango Diamond Company (ODC). Debswana has confirmed that it parted ways with these employees through a voluntary separation process.
Agatha Sejoe, Senior Corporate Affairs Manager – Brand and Stakeholder Relations at Debswana, explained in an interview with this publication that the move is part of the company’s ongoing efforts to engage with employees who wish to leave the company early.
“As we continuously monitor and adapt to prevailing market conditions, we have agreed, through engagements with our Workers’ Union, to continually explore opportunities for employees who wish to leave employment and pursue other ventures,” Sejoe said. “The company put out an expression of interest, which attracted a significant response from employees.”
So far, she said, the company has approved around 500 requests and released these employees through voluntary mutual separation. In balancing the company’s evolving staffing requirements with current operational needs, Sejoe noted that some requests have had to be rejected.
“We have implemented this programme without resorting to any forced retrenchments,” Sejoe said.
Debswana could not disclose the costs associated with the voluntary separation, citing policy constraints.
“As a matter of policy, we are constrained from disclosing the financial costs associated with the voluntary separation process,” she said.
While the future remains unpredictable, Sejoe emphasised that Debswana remains committed to safeguarding jobs and the well-being of its employees.
The Botswana Mine Workers Union (BMWU) has also confirmed its awareness of the process undertaken by Debswana.
“We are aware and have been fully engaged on the matter,” union president Joseph Tsimako said.
As the company continues its austerity measures, Sejoe stated that Debswana remains committed to fulfilling its contractual obligations.
“Regarding Debswana’s austerity measures impacting our suppliers, we can confirm that Debswana remains dedicated to honoring our contractual obligations and sustaining strong relationships with our suppliers, even in the face of current challenges,” Sejoe said. “Debswana has not suspended any contracts with its contractors over the past year. As a matter of policy, we do not disclose the value of contracts, as this information is confidential.”
In 2024, the diamond industry faced significant challenges as polished diamond demand continued to weaken, resulting in low profitability and rising inventories across the entire diamond value chain. Sejoe said Debswana responded by lowering production to protect prices and manage inventory levels.
“Indications are that, due to high inventory in the pipeline, the market will continue to be challenged, with steady recovery expected by the end of 2025,” Sejoe said, outlining Debswana’s outlook on the diamond market performance this year.
To address the current market conditions, Debswana is pursuing several initiatives, including aligning production with demand through the exploration of various production scenarios. The company is also driving operational and cost-efficiency improvements to align with planned expenditure and budget.
Additionally, Debswana said it is partnering with stakeholders to promote natural diamonds in response to evolving market dynamics.
As a long-term solution, Sejoe stated that Debswana’s forward-looking corporate strategy aims to position the company to respond to current and future market uncertainties in an agile and sustainable manner.
The diamond industry’s struggles have also affected major retailers like Sefalana. This week, Group Managing Director Chandra Chauhan revealed that the northern area has taken a significant hit.
“Our store is struggling quite a bit because there have been over 2,000 retrenchments in Orapa,” he said.
