Pick n Pay has cut 10% of its staff, eliminating approximately 3,500 jobs, the South African grocer said on Monday.

This is as a result of the country’s first recession in eight years.

The grocer has flagged lower or stagnant profits as consumer confidence and business sentiment plumb multi-year lows amid political turmoil.

Pick n Pay, which employs around 35,000 people, said the cost of the retrenchments will weigh on its profits in the six months to end-August.

“The voluntary severance programme is one of several steps we have taken to make our business more competitive in what is a tough trading environment. For reasons of timing, it will have a material impact on our result,” Chief Executive Richard Brasher said.

“In subsequent years, the reduction in employee numbers will have a significant positive impact on the operating costs of the group, creating additional headroom to reduce prices and improve value for customers,” pick n pay said.

“These roles and functions were no longer required due to improvements in organisation, planning and technology,” Pick n Pay said.

The company has invested heavily in new distribution centres since 2010 to compete with rivals Shoprite and Woolworths, who have both grown rapidly over the past decade.