Gem Diamonds (LON: GEMD) has announced sweeping cost-cutting measures, including mass layoffs and executive pay cuts, as it grapples with a collapsing diamond market.
The Africa-focused miner, which operates the Letšeng mine in Lesotho, reported a 43% drop in revenue to $44.7 million for the first half of its financial year. Sales volume fell 22% to 44,360 carats, while average prices plummeted 26% to $1,008 per carat.
To stay afloat, Gem Diamonds is slashing monthly operating costs by up to $1.6 million and shedding around 250 jobs — roughly 20% of its workforce. Top executives have voluntarily taken salary reductions.
“Given the prolonged weakness in diamond prices, a weak dollar, and ongoing US tariff uncertainty, we’ve taken tough but necessary steps to preserve cash and protect shareholder value,” the company said.
Despite hitting production targets, the miner has been unable to escape the steep decline in rough diamond prices and adverse currency fluctuations. Investors reacted sharply — shares fell over 20% in early London trading before recovering slightly to 5.5 pence, valuing the company at just £7.7 million ($10 million).
Gem’s move mirrors a wider crisis across the diamond sector. Just last week, Burgundy Diamond Mines (ASX: BDM) suspended operations at its Ekati mine in Canada, triggering mass layoffs. All three major diamond mines in Canada — Ekati, Diavik, and Gahcho Kué — are now on a path to closure by 2030.
Global Crisis Deepens
The industry’s troubles have accelerated in 2025. De Beers, the world’s biggest diamond producer by value, saw revenue collapse by 44% in Q1 and now holds $2 billion in unsold inventory. It plans to axe over 1,000 jobs at its Debswana joint venture in Botswana.
Russia’s Alrosa, under Western sanctions, reported a 77% profit drop and halted output at key mines.
Meanwhile, Petra Diamonds (LON: PDL) is battling for survival after a 30% sales slump and the sudden exit of its CEO. Lucapa (ASX: LOM) entered voluntary administration in Australia, and Sierra Leone’s Koidu Limited shuttered operations after labour unrest wiped out $16 million, leaving over 1,000 workers jobless.
Even Lucara (TSX: LUC), which operates in Botswana and Canada, has warned of “going concern” risks despite record production.
At the heart of the crisis: falling demand for natural diamonds, competition from cheaper lab-grown stones, and high inventories amid weak global sentiment.
All Eyes on De Beers
Once the unchallenged king of diamonds, De Beers is now up for sale. Parent company Anglo American (LON: AAL) has slashed its valuation by $4.5 billion in just over a year. So far, no buyers have emerged, but Botswana — which jointly owns Debswana with De Beers — is reportedly lobbying for a controlling stake.
As confidence continues to erode, the once-glittering diamond industry is being forced to confront an uncomfortable reality: the sparkle may never return.
