OK Zimbabwe temporarily suspends employee salaries

Retail giant OK Zimbabwe Limited has suspended its payroll after its joint works council approved a temporary halt to salaries and wages, as the company battles severe financial distress under corporate rescue proceedings.

The decision was taken on 22 May 2026, following a board resolution initiated in February under Section 122 of the Insolvency Act, which saw the company voluntarily enter corporate rescue to stabilise operations and avoid collapse.

According to internal processes, the firm was placed under the supervision of a corporate rescue practitioner tasked with restoring viability and restructuring the business.

The suspension of payroll is described as a temporary but urgent intervention aimed at stabilising cash flow and supporting recovery efforts.

"The Joint Works Council shall ensure compliance with relevant labour laws governing such adjustments," the company said.

"This is a difficult and uncomfortable measure, but a necessary intervention in our efforts to turn around the business."

The suspension means employees will not receive salaries or wages from May 2026 until further notice, marking one of the most severe labour-related decisions taken by the retailer in its recent history.

OK Zimbabwe Limited, which traces its origins back to 1942, has long been one of Zimbabwe's dominant supermarket chains, building a nationwide footprint through decades of expansion and acquisitions.

The company currently operates multiple retail formats, including OK Stores, Bon Marché outlets and OKmart branches, serving both mass-market and high-end consumers.

However, its recent financial performance has shown significant deterioration.

According to its 2025 annual report, the company's store network shrank from 74 to 69 outlets, while its customer base declined sharply from 34 million to 22 million. Staff numbers also fell from 4,116 to 3,311.

Financially, revenue dropped from US$511 million to US$245 million, while EBITDA plunged from a positive US$40 million to a loss of US$5 million.

Borrowings increased over the same period, rising from US$3.5 million to US$8 million, reflecting growing reliance on debt to sustain operations.

Analysts attribute the crisis to a combination of currency instability, liquidity constraints and rising operating costs, which have left the retailer struggling to maintain working capital.

The corporate rescue process is expected to continue as the company attempts to restructure its operations and restore financial stability in one of Zimbabwe's most established retail brands.