Eskom brass face the chop as utility tries to cut costs
● At least 10 senior executives face the axe at Eskom as the cash-strapped energy utility moves to cut its bloated management.
The retrenchments, under discussion by the board, are one of the cost-cutting measures Eskom is implementing after a financially challenging year that ended with renewed load-shedding.
Eskom spokesperson Khulu Phasiwe said the staff whose jobs are on the line are on the executive management team that reports to CEO Phakamani Hadebe.
They are tasked with the day-to-day running of the company.
“We are indeed looking at a ballpark figure of about 10 executives but these retrenchments have not yet been finalised,” Phasiwe said.
He said the state-owned enterprise (SOE) had previously acknowledged it had too many executives.
“Senior managers and divisional managers will not be affected. This process will be rolled out within the coming weeks,” he said.
“Eskom is trying to reduce its costs. Our cost base has increased, so clearly something has to be done.
“The unions have said there are far too many managers at Eskom and if there are to be retrenchments, it should start there. We are now dealing with that part of the management structure.”
Eskom is relying on government bailouts to keep afloat, blaming low tariffs, stagnant demand and increased costs for its parlous situation.
The energy producer is also grappling with reduced generation performance, low coal stockpiles and increases in municipal debt.
Eskom’s interim results show that profit before tax came in at R8.9bn in 2017, but that fell to R1bn by September 2018. The results also reflected a 25% increase in municipal arrears.
The SOE budgeted for a pre-tax loss of R11.2bn in 2018/2019 but indications are that the loss is likely to be worse and recent wage increases in the bargaining forum have put further pressure on costs.