Job cuts looming as De Beers loses its sparkle

Diamond miner De Beers is about to embark on a far-reaching overhaul following a less-than-sparkling performance.

There are growing fears of a ‘jobs bloodbath’ under plans being drawn up to cut costs at the group, a senior industry source told The Mail on Sunday.

De Beers, which recently appointed Kenyan actress Lupita Nyong’o as its first global ambassador, is the world’s largest producer of diamonds by value and has 20,000 employees.

Earlier this month Anglo spooked the City when it said it needed to slash spending across the company – including at De Beers.

Diamond prices have slumped on lower demand coupled with a massive rise in the production of far cheaper lab-grown gems, which now represent about 18 per cent of the market – up from just 0.3 per cent in 2015.

The source said: ‘Senior management are being interviewed effectively with a view to cutting their jobs. Lab-grown diamonds are increasingly a threat. 

When you’re faced with a decision such as an engagement ring, you could buy a lab-grown one that looks and is effectively exactly the same, save the money and then go on the world’s greatest honeymoon.’

The source said there are fears of ‘significant writedowns’ of the value of its inventory. De Beers made an estimated £2.9billion selling diamonds in 2023 – down by more than a third compared with 2022.

The company told the MoS that prices have ‘stabilised’, but it expects improvements in trading to be ‘gradual’.

There are also concerns that an agreement clinched with the government of Botswana earlier this year could hit De Beers’ long-term finances.

The company mines the majority of its stones in the African country. The Botswana government and De Beers run the mines through a joint venture. But Botswana’s leaders have been unhappy with the terms.

Under an agreement reached in the summer Botswana will own larger percentages of the stones produced in the future, so De Beers could receive less money in the long run. The company is also tied to handing Botswana hundreds of millions of pounds over ten years to help develop its economy.

City analysts speculate that the group could become a takeover target or that it might break itself up. 

De Beers boss Al Cook, who started at the company in February, said the group is ‘very pleased’ about the agreement with Botswana.

A De Beers spokesman said: ‘We have recently been reviewing our strategic priorities as we focus on position De Beers for long-term success and maximising sustainable value.’

The spokesman added that it is looking at ‘the optimal organisational structure’ to ensure the business is ‘as effective and efficient as possible’.