The government cannot continue to justify the number of people employed at Eskom given the amount of electricity the beleaguered utility is producing, deputy president David Mabuza said in parliament on Thursday.
“We must scale down ... the amount of workers has doubled since 2008, but the amount of energy we are producing is less. That means the demand is getting less [as] a lot of people have opted out of Eskom, so the number of employees does not justify the business case,” Mabuza said during a Q&A session in the National Council of Provinces.
Eskom, which supplies virtually all SA’s power, employs about 46,000 workers costing it almost R32bn in salaries, bonuses, overtime and benefits. It has been struggling to stay afloat and keep the lights on. Before Covid-19 hit, ratings agencies cited state-owned entities (SOEs), including Eskom and SAA — which carry debts of close to R700bn between them — among the risks to the sustainability of the nation’s finances.
Despite being overstaffed, the government has previously said it does not want retrenchments imposed on Eskom as part of efforts to turn the bankrupt power utility around. A 2016 World Bank study of utilities in Africa, which looked at the staffing data for 36 countries, found that Eskom needs a workforce of 14,244.
Mabuza said government’s support for headcount reduction does not mean it is backing retrenchments, rather the reduction will be achieved via natural attrition and voluntary severance packages. The plan, in the short term, is to reduce the headcount by at least 6,000, he said.
“We are not retrenching but affording people different tools, such as severance packages. Eskom has put R75,000 as a gratuity if [staff] take a severance package. So we are not forcing people out. Some are getting out of the system through natural attrition, such as death,” Mabuza said.
His comments came as Eskom imposed its second day of load-shedding after the loss of generation capacity and to replenish emergency generation reserves.
This week, Eskom said there is a high probability that load-shedding will continue throughout the weekend, depending on plants returning to service from planned maintenance, as well as the levels of the emergency generation reserves.
Mabuza said: “We can confirm that the headcount reduction plan was communicated with the government ... the restructuring of a company of Eskom’s magnitude will not be an easy task and it will take a long time.”
He said the government’s position is that the power utility must be supported to implement a comprehensive turnaround plan.
“The restructuring process of Eskom into an efficient and financially sustainable entity means that its turnaround and organisational transformation must be focused on achieving significant cost reductions and savings, while improving overall efficiencies across key cost drivers, [including] coal contracts and compensation of employees,” Mabuza said.
He said, however, the Eskom turnaround strategy prioritises the replacement of critical skills, such as engineering, but “We cannot continue to justify the number of people employed at Eskom given the amount of electricity we are producing therefore we must scale down.”
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