South African pharmacy group Dis-Chem has begun a formal restructuring process that could affect more than 500 employees, as it seeks to realign its business for future growth.

In a statement issued on Friday 24 April, the group said it has initiated a Section 189 consultation process in terms of the Labour Relations Act, a mandatory procedure employers must follow when considering retrenchments based on operational requirements.

According to the group, the move forms part of a broader review of its operating model, organisational structure and ways of working, aimed at supporting its long-term ambitions in a competitive and evolving healthcare market.

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Head office focus

Dis-Chem said the review is intended “to optimise the right structures to ensure continued brand progress”, adding that its internal framework must remain aligned with its goal of expanding access to healthcare while keeping costs down.

CEO Rui Morais stressed that the process should not be interpreted as a large-scale downsizing exercise.

Morais took over the leadership reins of the national pharmacy group from Ivan Saltzman in 2023. “Without context, when people hear Section 189, they immediately default to large-scale retrenchments,” he said in the statement.

“The process we’re undertaking is designed to enable a new head office operating model, which will see an additional 200 jobs added to key head office departments.”

He noted that these roles would be created in areas where the company has historically underinvested.

More than 500 employees, all based in certain head office divisions, have been invited to participate in the consultation process. This represents less than 2,4% of Dis-Chem’s workforce of about 22 000 employees.

The company emphasised that retail stores and distribution centres will not be affected.

Morais said one of the key outcomes of the restructuring would be a revised organisational structure featuring clearer accountability and improved integration with X, Bigly Labs, the group’s innovation unit behind initiatives such as its Better Rewards programme.

A key outcome of this process will be a new structure with clear lines of accountability.

The company also indicated that it is still in the early stages of the consultation process, which could take several months to conclude.

Morais acknowledged that the formal notices issued to employees can appear harsh in tone. “The unfortunate thing about a Section 189(3) Notice – the notice issued to affected employees – is that it requires very blunt and rigid language,” he said.

He added that the company remains committed to engaging with affected staff and exploring possible alternatives to retrenchments. “Dis-Chem remains committed to meaningful consultation with those impacted by the process and exploring alternatives to retrenchment.”

The retailer maintains that the restructuring is necessary to position the business for sustained growth and competitiveness.

“The process we’re undertaking is designed to ensure that Dis-Chem is optimally structured for future growth and success, aligned to its strategic priorities,” Morais said.