Job cuts are unavoidable if the public broadcaster is to avert a collapse similar to national carrier SAA or state-owned arms maker Denel, SABC board chair Bongumusa Makhathini said.
The broadcaster was thrown into fresh turmoil this week after it announced plans to issue retrenchment notices, sparking staff protests that included threats to launch a go-slow and journalists refusing to go on air.
That was followed by an apparent climbdown, with minister of communications Stella Ndabeni-Abrahams, who blocked previous efforts by the board to cut staff, wading in and saying the board must look for an alternative plan.
Makhathini insisted on Wednesday that job cuts could not be avoided because wages that ate up just over 40% of revenue were not sustainable. Unlike SAA, the national airliner that collapsed into business rescue in late 2019, the broadcaster wasn’t allocated fresh funding in finance minister Tito Mboweni’s medium-term budget policy statement in October.
The SABC has been in a financial mess for several years and has often required government bailouts to continue operating, but these have dried up as Mboweni seeks to rein in the country’s debt load and avoid a full-blown fiscal crisis.
The wage bill is unsustainable, Makhathini told Business Day on Wednesday.
"If we do not address this, this organisation will collapse like SAA, or will be unable to pay salaries like Denel."
Bloomberg reported on Wednesday that Denel, one of the state-owned enterprises constrained by corruption and mismanagement during Jacob Zuma’s presidency, wanted to cut about 10% of its workers of just more than 3,000 as it seeks to survive, after also failing to get fresh government funding.
The SABC, which has a wage bill of more than R3bn a year for its 3,000 permanent employees, received a conditional R3.2bn bailout from the government late in 2019, which it used to pay off most of its debt and invest in content. Part of the conditions included cutting the cost of remuneration. Management has said it wants to reduce it by at least R700m.
The embattled public broadcaster, which reported a loss of R511m for the 2019/2020 financial year, has been aggressively trying to cut costs in recent years, but this has been blocked on several occasions by Ndabeni-Abrahams and unions. Makhathini said if the SABC failed to cut the wage bill, the broadcaster would be on track to record a R1.2bn loss in 2021.
After a day of high drama at the SABC offices in Auckland Park on Tuesday, SABC group executive for news Phathiswa Magopeni is said to have relented and withdrew the notices of retrenchments.
But Makhathini said only the board chair is authorised to communicate a change of direction in the cost-cutting exercise.
Asked whether Magopeni had erred, Makhathini said the matter was a "management issue" and SABC management would deal with it.
On Wednesday morning, a memo was sent to staff, indicating that the job cuts were back on the table and that 400 workers would be affected.
Unions are planning to go on strike later this week, which could lead to a blackout on SABC channels.
Makhathini said job cuts would be across the board and consultations had effectively taken place since 2018 when retrenchment plans were first announced. In 2018, Ndabeni-Abrahams rode into a storm two weeks after she was appointed as minister, clashing with the board over the planned retrenchment of 981 permanent staff and 1,200 freelancers. She told employees that nobody would lose their jobs.
She met the SABC board on Tuesday and insisted again that it considers alternatives.
The matter was scheduled to be discussed in parliament on Wednesday evening.
"We have been discussing retrenchments for the past two years. We have been bringing costs down without touching employees," Makhathini said.
"With a wage bill of about R3bn for a R6bn business, the truth of the matter is that it is unsustainable," Makhathini said.
ANC secretary-general Ace Magashule told the broadcaster in an interview on Wednesday that the party’s MPs were expected to fall in line and support the call to ensure that job losses are averted. He said the board, "which has ANC deployees" should also do the same.
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