At least 15 companies have retrenched in the first six months of this year amid fears that more could embark on similar exercises as the economic crisis deepens.
Zimbabwe Congress of Trade Unions (ZCTU) secretary general Japhet Moyo said last week that 2 491 workers had been retrenched in the first half of 2014, saying the figures were in fact conservative as they did not include companies that did not handle issues through the Retrenchment Board.
"At least 2 491 workers lost their jobs in the first six months of the year with 15 companies having retrenched during the period. In the first four months 1 891 workers were retrenched and during May and June, 601 workers were retrenched," he said.
"It seems we have gone back to the crisis period and the situation is now desperate and workers are wallowing in poverty. Some workers have not been awarded a salary increment since 2009 when the country introduced the multi-currency system."
He said business, labour and government needed to start discussing these issues as workers were struggling as the economy slided back to the crisis of the pre-inclusive government era.
"Now we are not talking. Business is on its own and government is on its own. We are not on the [negotiating] table. If we resuscitate the Tripartite Negotiating Forum, we will be able to give ideas to government," he said.
Last year over 9 000 workers were retrenched by various companies' countrywide.
Companies are struggling to stay afloat due to the absence of working capital and depressed demand.
Retailers have recorded a low uptake of their products. The manufacturing sector has said that demand has been suppressed amid indications that capacity utilisation would fall this year from the 39,6% recorded in 2013.
The stock market, that shows the health of an economy, has also performed in tandem with what is obtaining on the ground as the industrial index slipped by 7,69% to 186,57 points due to losses in heavy counters such as Delta, Innscor, OK, Hippo and SeedCo. The quintet is among the 10 counters that drive activities on the Zimbabwe Stock Exchange.
In a research note, brokerage firm MMC Capital said the "weak economic fundamentals in Zimbabwe will continue to be the major risk impacting negatively on the upside potential of the local bourse".
"The economy is experiencing a slowdown in consumer spending; depressed mineral output; stagnation in money supply growth and tighter revenue collections, among other impediments. The current environment, however, presents a good opportunity for long term equity players as the majority of stocks are currently heavily discounted," it said.
Companies are facing challenges in securing cheap financing for retooling as banks are reluctant to offer loans due to the high rate in defaults.
Statistics from the Reserve Bank of Zimbabwe showed that the ratio of non-performing loans (NPLs) to total loans increased to 16, 96% as at March 31 2014, up from 15,92% as at December 31 2013.
NPL refers to when payments of interest and principal are past due by 90 days or more, or at least 90 days of interest payments have been capitalised, refinanced or delayed by agreement.
The increase in NPLs has raised fears that banks will cut on lending at a time companies need funding for retooling and working capital needs.
MMC Capital said the deteriorating economic fundamentals in Zimbabwe have been the chief contributor to the sector's worsening NPL ratio as most borrowers were failing to service their debts due to deteriorating macroeconomic fundamentals.
It warned that a cutback on lending "will have a huge bearing on the economy as the reduced credit supply will lead to working capital challenges and in many instances businesses will fail to fund capital expenditure".
"The net result will be a decline of private gross fixed capital formation and private consumption which in turn will negatively impact economic growth," MMC said.