Eskom looking to retrench managers in order to cut costs

Eskom, South Africa’s state owned energy supplier, is looking to retrench management staff in an effort to reduce the company’s exorbitant wage bill.

This is according to an official statement issued by the power, which has since been reported on by Business Tech. According to the statement, Eskom’s board has already approved the retrenchment process.

Eskom plans to maximise profits

Eskom is broke and broken. The energy supplier finds itself in a quagmire of financial rot, perpetuated by widespread corruption, mismanagement and nepotism bred under the catastrophic tenure of former boss Brian Molefe.

Thanks to generous government bailouts, Eskom has managed to keep South Africa’s lights burning. Yet, in theory, the power utility will have to pay back a whopping R387 billion in debt – a figure which is set to rise to R600 billion within the next four years.

As insurmountable a task as that may seem, it’s not the worst of Eskom’s headaches. No, the cluster migraine which has debilitated the company comprises of coal shortages, defaulting municipalities, the mass exodus of senior executives and the ever-present threat of industrial action.

In an attempt to turn a profit, South Africa’s most vital state owned enterprise was recently awarded the right to increase electricity tariffs in 2019. This has not gone down well with the average South African.

Yet, in what seems to be a step in the right direction, Eskom has now resolved to trim its bloated workforce.

Managers are on their way out

Finance Minister Tito Mboweni has said that Eskom needs to cut at least 30 000 jobs in order to bring some semblance of financial stability back to the embattled power supplier. While Eskom is reluctant to axe that many staffers, it has confirmed that it will be chopping jobs, from the top, saying:

“Eskom’s Board of Directors has decided to review the company’s organisational design to enhance operational and cost efficiencies. As such, Eskom’s Board has approved a Section 189 process for its executive structure.”

While Eskom has declined to reveal the exact details relating to the culling, earlier in the year, the power utility hinted at cutting around 7 000 jobs.