Sunday Times

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.

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