Africa Debt Economy Energy Finance Labour South Africa

South Africa’s Eskom to spend up to US$27M on severance packages

South Africa’s Eskom has offered some managers voluntary severance packages, capping costs at 400 million rand ($27 million), a communique sent to staff by the struggling state power utility showed.

Eskom does not generate enough cash to cover its mammoth debt servicing costs and expects to make a loss of around 20 billion rand this financial year.

The severance packages are open to managerial employees in non-core positions as well as managers from 60 to 62 years old, according to the communique, which was dated Feb. 6.

Eskom said in a statement that it would recoup the cost of the severance packages through savings within a year.

“Eskom will ensure that no critical skills will be lost as a result of the programme,” the statement said. “The purpose of the separation process is to rationalise management layers, which will lead to an efficiently run company.”

Analysts have long said that Eskom should cut its bloated workforce of more than 46,000 staff.

Under pressure from trade unions, South African President Cyril Ramaphosa said last year that voluntary severance packages would be the preferred method to cut costs at Eskom, rather than forced layoffs.

Eskom said in the communique that staff could apply for the severance packages from the third week of February, with employee exits planned for the end of April.

Eskom also offered voluntary severance packages in 2015.

$1 = 14.9245 rand

Source: Reuters

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.