Adoption of new technologies in industries is contributing towards retrenchment levels in the country, the Confederation of Zimbabwe Industries has said. In its 2012 annual Manufacturing Sector Survey report, the CZI said 21 percent of industries engaged indicated that they had retrenched permanent staff.
"This is mainly due to automation as well as a downturn in business," it said.
The survey indicated that some companies had wanted to retrench but the Government blocked them.
Labour costs have also negatively impacted on business viability and have remained a challenge.
"At least 81 percent of industry indicated that their wage bill had increased from 2010 to 2011 with major reasons being wage increases," it said.
The average labour cost as a percentage of total inputs for the manufacturing sector stands at 27 percent, while the total employee costs are 35 percent.
Meanwhile, the survey showed mixed reactions in terms of productivity related wages for the companies.
However, according to some reports, figures of retrenched workers in the first half of the year dropped slightly to 1 140 from 1 665 in the period last year.
Low capacity utilisation, low product demand, obsolete machinery, lack of working capital and raw materials are also some of the factors which trigger most of the retrenchments. Several companies, including Air Zimbabwe, the Cotton Company of Zimbabwe, Jaggers and a number of banks retrenched in 2011 and this year.