Letšeng Diamonds Announces 20% Workforce Reduction Amid Market Challenges as Union Raises Concerns Over Lack of Consultation

Lesotho’s largest diamond mine, Letšeng Diamonds, recently announced plans to reduce its workforce by approximately 20 percent in response to sustained pressures from a prolonged slowdown in global diamond prices, a weak US dollar, and ongoing uncertainties over US tariffs on Lesotho’s exports. This move forms part of a broader cost-cutting strategy aimed at conserving cash, protecting shareholder value, and ensuring the sustainability of operations.

In a statement issued on Wednesday, Letšeng Diamonds explained that while it has met production targets, the mine has not been immune to the adverse impacts of rough diamond price weakness and unfavorable exchange rate movements. The company said it conducted a comprehensive review of its short-term mine plan and operational costs, implementing decisive measures including a reduction in waste mining activities in both its main and satellite pits to a minimum over the next 12 months, without compromising the long-term life-of-mine plan. Both treatment plants will continue operating at existing volumes.

“The company regrets that an approximately 20 percent reduction in workforce may be necessary to align with the scaled-back waste mining operations and other required operational adjustments,” the statement said. Engagements with employees and stakeholders are ongoing to manage the rationalization process responsibly and transparently.

However, the Independent Domestic Union Lesotho (IDUL), which represents 35 workers at Letšeng, has expressed strong dissatisfaction with the retrenchment decision, arguing that the company failed to consult the union as required by the Labour Act of 2024 and the Code of Good Practices, 2003. IDUL Chairperson Clarke Letsie condemned the move as a violation of workers’ rights and a disregard for the collective bargaining process.

“Prior consultations are crucial as they enable the union to provide essential services to affected workers, including counselling and negotiations related to benefits and other work matters,” Letsie said. He confirmed the union plans to formally write to Letšeng this week demanding proper consultations and warned that if the company fails to engage in meaningful dialogue, legal action may follow to protect members’ interests.

The union emphasized that collaborative engagement is vital to uphold fair labour practices, safeguard workers’ welfare, and ensure that retrenched employees receive all entitled benefits such as severance pay. IDUL also seeks assurances that retrenched workers will be given priority for recall once operations return to normal.

The Labour Act, enacted in January 2024, provides a comprehensive framework to regulate employment relations and promote fair labour practices for both employers and employees. The conflict at Letšeng highlights the ongoing challenges faced by Lesotho’s diamond sector amid a difficult international market environment.

Earlier this year, the US imposed a 50 percent tariff on Lesotho’s diamond exports, which was later suspended to allow negotiations between the two countries. Although the initial three-month grace period expired in July 2025, an extension was granted until August 1, 2025, leaving Lesotho among several nations awaiting tariff resolutions. The tariff uncertainty has already begun to impact the mining sector’s stability.

Last year, other diamond mines such as Kao and Liqhobong also implemented workforce reductions due to declining diamond prices internationally, underscoring the pressure faced by the industry.

As Letšeng Diamonds moves forward with its restructuring efforts, the dispute with IDUL underscores the critical importance of transparent communication and worker involvement in decisions that deeply affect livelihoods. With ongoing market uncertainties, finding balanced solutions that protect both business sustainability and workers’ rights remains a pressing challenge for Lesotho’s mining sector.