Large-scale retrenchment despite Ramaphosa’s promises
IN A joint statement, the SACP and Cosatu said they were concerned about the intention to retrench workers at state-owned enterprises.
The South African Post Office (Sapo) and mobile network operator Telkom are set to retrench staff despite President Cyril Ramaphosa’s struggle to fulfil his promise of creating millions of jobs.
Sapo is retrenching 6 000 workers and Telkom is set to retrench 15% of its workforce.
This comes while millions of South Africans remain jobless despite the president’s promise to create more than 6 million jobs since he took office in 2018.
Admitting his failure during his recent State of the Nation Address, Ramaphosa referred to unemployment as a “crisis” which remains one of the government’s priorities.
He said so far, only one-and-a-half million jobs had been created and to address the challenge, the Employment Tax Incentive (ETI) has been expanded to encourage businesses to hire more young people in large numbers.
Ramaphosa said the Social Employment Fund was recruiting 50 000 participants in the next phase to undertake work for the common good, adding the revitalised National Youth Service would create a further 36 000 opportunities through nonprofit and community-based organisations.
Sapo said retrenchments formed part of a turnaround strategy that includes cutting staff salaries by as much as 40%.
Sapo said this was an effort to ensure the entity’s viability after it suffered a R2.3 billion deficit in the previous fiscal year.
The SACP and Cosatu said Sapo’s decision would leave not only affected workers but also their dependants behind, with a massive impact amid persisting high levels of unemployment, poverty, and inequality.
Nonceba Mohlauli, the Presidency’s spokesperson, said questions should be directed to Ramaphosa’s spokesperson, Vincent Magwenya, who also referred questions to the Department of Communications and Digital Technologies.
Department of Communication and Technology spokesperson Tlangelani Manganyi said the situation was untenable and required open and robust engagement between the leadership of Sapo, workers and workers’ representatives to consider all options to return Sapo to viability.
PWC senior economist Christie Viljoen said the government should improve the electricity situation to deal with the job crisis.
“A country’s power system should supply cost-effective electricity to customers in an efficient, reliable, and sustainable manner.
“Not only does this underpin economic activity, but it also contributes towards increased economic growth through levers such as lowered costs of production and other services, increased investor confidence, country competitiveness, and improved living standards,” said Viljoen.
Investec economist Lara Hodes said: “We need an increase in confidence to encourage investment and accordingly growth and employment opportunities.”