Eqstra to cut 7 pct of jobs, halts expansion

By Tiisetso Motsoeneng

JOHANNESBURG (Reuters) - South African leasing and capital equipment firm Eqstra Holdings plans to cut 7 percent of its workforce as it freezes expansion plans owing to weak demand for its products and services, it chief said.

"We will be reducing our headcount by about 7 percent. A lot of it has already been done," Walter Hill, Eqstra CEO, told Reuters in a recent telephone interview.

Hill said Eqstra, which employs 4,500 people, would not pursue expansion in the next 2-3 years because "any opportunity in this environment could turn out to be a liability".

"The party has stopped, the music has stopped," said Hill, referring to rising commodity prices and stronger economic growth that fuelled earnings in the past year, but have tailed off due to the global financial crisis.

"Our strategy is to batten down the hatches."

Eqstra, which was spun off from industrial firm Imperial Holdings last year, carries out open cast hard rock contract mining and plant hire in Africa, and sells and leases capital equipment such as forklift trucks in Africa and Britain.

Hill said business at Eqstra's South African leasing business had been good so far in the second half of its financial year, declining to give a forecast.

But the firm's sales volumes of industrial equipment such as forklift trucks slumped 40 percent in January and February compared to the same period last year and Hill did not expect improvement until the economy recovered and credit markets improved.