Job cuts alone will not rescue flailing SOEs
Anumber of state-owned enterprises (SOEs) are in the throes of pandemicfuelled change, whittling down staff complements in line with their diminished earning capabilities. The pandemic has helped bring to the surface what seems to be chronic dysfunction in these companies. SAA has just spent R1.5bn on severance packages for about 3,700 employees. PetroSA met unions on Friday as part of its section 189 process to retrench about 500 employees. About 300 employees of Autopax, owner of Translux and City to City bus services, were served with retrenchment notices three weeks ago. (Autopax is a subsidiary of the Passenger Rail Agency of SA.) Eskom cut 2,000 jobs last year and 4,000 more must go before the utility reaches the “right size”. The SABC retrenched 620 employees last month, amid considerable drama.
Horrible though the jobs bloodbath is, it was to be expected. Innovative leaders navigated their way around the pandemic. Not so in the SOE sector, where executives know there’s always a bailout around the corner.
The retrenchments come after the economy faced its biggest contraction in seven decades last year. Unemployment currently hovers close to 10 million.
The cuts, painful but necessary, ought to constitute the beginning of a broader strategic plan to ensure SOEs live within their means. That is what self-respecting companies do. Some of the challenges such companies face are historical, but others are a consequence of sheer ineptitude perpetuated by a ruling party preoccupied with its own internecine battles.
If the culling of jobs is to serve any purpose, the leadership of these SOEs must seek long-lasting solutions. To the extent that these job cuts are a result of corruption, or such ludicrous appointments as that of Hlaudi Motsoeneng at the SABC, the nation owes those affected an apology.
To atone, we must urgently ensure that all those accused of corruption face the full might of the law while management incapacity is addressed. The Hawks and the National Prosecuting Authority are struggling with a chronic shortage of expertise. But any undue delay in capacitating these institutions will take the country several steps back. Retrenching people without resolving performance impediments is a short cut to nowhere.