More job losses loom, despite Ramaphosa’s promises

Even as President Cyril Ramaphosa was promising – during his State of the Nation address (Sona) last night – concrete action to tackle unemployment, thousands of people around the country were facing imminent retrenchments.

And, if Ramaphosa’s promises don’t become reality and the economy continues its downward trajectory, many more thousands could find themselves on the street this year.

The looming closure of Tongaat Hulett’s sugar mill in Darnall, which will cost the jobs of nearly 400 workers, is just one example. Others include Eskom, South African Breweries (SAB), Educor, Aspen and Sibanye-Stillwater, which are all reported to be retrenching staff.

At South African Airways, business rescue practitioners are involved in a legal battle with unions over their plans to make the airline leaner and more efficient, which would inevitably mean more retrenchments.

According to economist Mike Schussler, these job cuts are a result of all the years of corruption under former president Jacob Zuma.

“There is no doubt that these retrenchments are going to hurt our economy but, believe it or not, they are necessary because our economic growth is too slow,” said Schussler.

He said that if the country continued on the same growth path as last year, which was less than 2%, there would be more job losses next year.

He said SA needed a more business-friendly attitude on the part of government.

“If we do not see a more business-friendly attitude, then I am afraid the economy will shrink even further and we can expect more losses,” he said.

Political analyst Daniel Silke said: “The main problem is that any reform that the president wants to introduce will get stuck in the political quicksand of ANC policies.”

He said that since the ANC was heading towards the 2021 local government elections, the issues surrounding youth unemployment, job creation and state capture would play a role in how people vote.

Silke said Ramaphosa was under immense pressure to play a balancing act by introducing new economic reform policies that were practical, while also answering to the ANC.

“What South Africa needs is a radical overhaul of our governance and policy framework,” he said.

Meanwhile, cash-strapped power utility Eskom said it had started with offering voluntary severance packages (VSP) to senior employees and the process would be implemented during March and April.

In a statement issued yesterday, Eskom said there would be no forced retrenchments and the VSP excluded workers at the lower levels (nonmanagerial).

“Eskom will ensure that no critical skills will be lost as a result of the programme and management will take every precaution to ensure that the VSP process caters to the best interests of Eskom,” read the statement.

Through this process, Eskom said it would spend R400 million in order to cut overhead costs.

“The purpose of the separation process is to rationalise management layers, which will lead to an efficiently run company.”

Another affected company which is looking to cut about 500 jobs is SAB, which confirmed it was in the process of reviewing its business operations in light of the prevailing economic conditions in South Africa.

Spokesperson Refilwe Masemola said the review would affect only a small minority of its workforce in specific areas and not across the business as a whole. “In doing so, SAB will, at the same time, implement actions to identify growth opportunities that could create future employment prospects, thereby enabling SAB to return to its current level of employment,” said Masemola.

She said SAB had approached the Commission for Conciliation, Mediation and Arbitration, in consultation with the The Food and Allied Workers Union, in order to minimise the impact of job losses, where possible.

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