Mining and labour analyst, Mamokgethi Molopyane, says the economic impact from the coronavirus (COVID-19) pandemic, which exacerbated an already ailing economy, will have dire consequences on the sustainability of many companies.
Many companies have announced possible retrenchments as they battle not only the effects of the lockdown caused by the pandemic but also the effects of the recession.
The South African Broadcasting Corporation (SABC) plans to retrench 600 permanent employees and 1 200 freelancers in its bid to be financially stable.
The SABC plans to conclude its restructuring process by September this year.
In the video below details are given about SABC’s planned restructuring process
South African’s biggest non-food retailer Edcon has served 22 000 of its employees with retrenchment notices and in aviation, BidAir Services which employs about 5000 people across its airport and travel services divisions, has begun steps to retrench more than half of its workforce.
Molopyane elaborates: “The ripple effects are going to be much dire in South Africa. It found an economy that was in a recession or had stagnated or that was facing increasing unemployment but also for key sectors such as mining that had companies that were already restructuring of their restructuring plans were already in place.
It’s going to be slow. Treasury has to give an optimistic view about the recovery but in reality for South Africa, I don’t anticipate a quick recovery and we would be deluding ourselves if we think it’s going to be a quick recovery.”
ArcelorMittal, Sasol to cut jobs
Steel producer ArcelorMittal South Africa has also announced plans to cut an unspecified number of jobs as part of a restructuring process to cut costs.
The company, which is Africa’s biggest steel producer says it expects crude steel production to take some time to return to historical or planned levels for 2020.
Energy and chemical company, Sasol, has issued unions with a Section 189 retrenchment notice to cut an unspecified number of jobs as well.
Sasol’s global workforce is over 31 000 with the bulk of employees based in South Africa.
In the video below Thabi Leoka discusses the economic impact of retrenchments:
