Liberty Announces Cost Cuts

October 20 - Early this week, the Chief Financial Officer of the Liberty Group, Russel Harte outlined ways in which the company will cut costs in order to survive tough economic conditions in South Africa, and at the same time help it carry through with core expansion plans.

Speaking at the UBS 11th Annual Financial Services Conference that took place in Cape Town on Monday, Harte said that the cost cuts included outsourcing several of the company's divisions, putting a temporary freeze on non essential recruitment, and delaying certain projects that could be put on hold for the moment.

Harte said that the present economic conditions triggered the Liberty Group to act immediately. "We have been focusing on cost cutting for the past two to three years," he said, "but this has become sharper probably in the past two to three months in response to the economic environment which we feel will extend right into the new year."

One of the main reasons for cost cutting was to enable to group to continue with its long envisioned plan of expanding into the rest of Africa. While the company at present operates in six different locations on the continent, it is hoping to spread even further, particularly in life insurance and healthcare fields.

Liberty is positive that if all goes according to plan, it will be able to increase its annual revenues from its external operations from the current 5% per year to 15% within three to five years.

Harte said that he did not expect the economy to improve any time in the near future, and was thus taking the Liberty Group through a process of cost cutting steps.

Economic growth in South Africa is being affected by rising interest rates, personal debt levels and food prices.