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Columnist Mamokgethi Molopyane writes that barely a month into 2020, retrenchments, the trimming of workforces and restructuring talks are dominating the news.
In recent years, the mining industry has been the sector undertaking such actions, but last week’s announcements came from companies in the telecoms and retail sectors. While Sibanye-Stillwater revealed that it had given voluntary packages to 1,142 employees as part of its restructuring process, Telkom announced plans to cut 3,000 jobs and Massmart said that it might close 34 stores, which would affect at least 1,400 employees. That is a possible 6,000 jobs gone, just two weeks into 2020. Moreover, restructuring activity will not be limited to the private sector. State-owned entities (SOEs) such as Eskom, SAA and the Passenger Rail Agency of SA (Prasa) will likely be forced to do likewise to ensure their survival. Unfortunately, with a growth rate of 0.9%, the economy offers no solution to either job losses or the creation of employment opportunities. Molopyane argues that the bottom line is that “South Africa being in this mess is of its own doing.” While there have been external factors beyond its control, the severe joblessness and other social problems have emerged from SA’s own doing. The regulatory framework, politicians’ lack of understanding of the effects of the global economy on the country, and its inability to produce coherent policies that can react to these changes – are said by Molopyane to be self-inflicted. Given that 2020 has started as the year of the culling of jobs, it is likely that the current 29.1% unemployment rate will break into the 30s. Moreover, considering the projected growth and the often-cited regulatory constraints, the year will continue to see a retreat in investment and very little job creation.
- Read the column by Mamokgethi Molopyane in full at Moneyweb
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