Unexpected gains in Australia's employment figures in April could be reversed as hundreds of workers may become jobless with the collapse of the Hastie Group and Games.
About 2,000 jobs are expected to be axed in Hastie Group's units in Victoria and New South Wales as the engineering service firm failed in its talks with the big four banks and new investors. As a result, a receiver is expected to be appointed for the group.
Prior to this development, an employee admitted massaging figures in the amount of $20 million to meet profit forecasts. In early May, Hastie forecast zero earnings for the first half of 2012 from anticipated income of $58 million.
The decline in earnings is because of writedowns in Novembers and $150 million deficit for the second half of 2011.
Hastie also has operations in New Zealand, the United Kingdom, Ireland and the Middle East and has 7,000 on its payroll. In Victoria, the Hastie-owned firms include Austral Refrigeration, Cooke and Carrick Plumbing, D and E Air Conditioning, Gordon Brothers, Norfolk Foodservices, Sharp and Pendrey, Spectrum Fire and Security, and Watters.
On Monday, Hastie said its 44 Australian subsidiary firms had named voluntary administrators.
Across Australia, computer and console game retail chain Game is about to shutter 60 stores which would mean the loss of 281 jobs. Games was placed two weeks ago under the administration of Kate Warwick of accountancy firm PricewaterhouseCoopers (PwC).
After Ms Warwick conducted a review of the stores' financial performance and talked with potential buyers, she came to a conclusion that it would not be viable to keep open 60 stores. It led to 17 head office employees and 264 store staff declared redundant.
Game Group, the Britain-registered parent company of Game, was placed under administration in March after it failed to find an investor. Most of Game's $120 million debts are owed to its British parent firm.
Although PwC received more than 30 expressions of interests from potential buyers of Game, Ms Warwick said it is not financially viable to continue operating the company at its current level.
She said what would help determine if Game could continue its business is the decision of landlords. The administrator has not announced which 60 of the 120 stores across Australia would close pending her study of the other expressions of interest. Ms Warwick said a decision on the future of the company and its employees would soon be announced in the coming days.
What happened to Game is a replication of the problems that beset consumer electronics retailers as WOW Audio Visual and franchisor Retravision Southern were earlier placed under administration, while Dick Smith is for sale and Harvey Norman reported a 44 per cent decline in first-half profit.
In April, the Australian Statistics Bureau reported an unexpected decline in unemployment data which was trimmed to 4.9 per cent from the anticipated 5.3 per cent forecast of analysts and economists.
These new reports of job losses could again result in higher joblessness rate.
Axed Aussie workers, particularly those who are in mid-level office employment, are expected to find it difficult to find new work due to the glut in job seekers in the March quarter. According to the Clarius Skills Index, 5,000 more people were added to job seekers in the first quarter of 2012 bringing the total to 15,000 skilled workers seeking employment.
Skilled workers who are in the engineering and IT fields have higher chances of finding employment since these two areas have a nationwide shortage of 7,000 workers, which confirms the two-speed economy in Australia. The report, released Monday, found there is an oversupply of 25,900 accounting clerks, receptionists, assistants and secretaries.
"The outlook for occupations within and related to the mining sector continues to remain strong at the expense of occupations in other industries such as manufacturing, retail and tourism," News.com.au quoted the report.
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