They believe that many more heads should be on the block as the country’s electricity generator works towards financial recovery. Eskom fires some of its top earners. Eskom’s cull of its top executives has been hailed, but experts have warned that it must be only the beginning of a severe downsizing of the power utility.
Eskom announced on Sunday that it had concluded its processes in reducing its executive. It had cut the number of F-band (highest earners) positions from 21 to nine. “This was not an easy process, and I appreciate the patience and support of all those involved as we worked to conclude matters as efficiently as possible,” said group chief executive Phakamani Hadebe.
“The new structure, along with our strategy, sets us on a path towards stability, and with an executive team that is refocused on improving operational efficiencies and reducing costs to improve profitability and drive the economy forward.”
He said regrading or combining executive roles came after extensive consultation with its executive management that started on November 7. Energy expert Chris Yelland said these retrenchments could not be viewed as a negative or a positive step, but a necessary one to save Eskom.
“Eskom is in much more serious financial trouble than many people realise, and it is important to see that something is done. “These retrenchments, starting at the top, are more about sending a message to the unions that the company is serious. They would have been viewed very negatively if they had started with the workers.
“I believe they are only a start and are still going to move to other levels,” said Yelland.
He said that next to coal, employee pay was the utility’s highest expense. He said while those retrenched earned a lot of money, about R3million each, the amount saved was very small compared to the billions the company needed. So the executive retrenchments would not have much financial impact.
“According to Eskom’s own financial report, they predict they will suffer losses close to R15billion by the end of the financial year in March.
“They are producing less electricity on double the staff complement. “The value of their coal has increased, they are paying more on loans and are spending less on maintenance, which is not sustainable,” Yelland said.
He said it was inaccurate for unions to describe the move as being part of internal politics. “The unions are quick to criticise, but do not come up with solutions.” Another energy specialist, Ted Blom, said yesterday that it did not mean that workers on the ground were safe: “These are very bold first steps because they started at the top.
“However, this is a year too late,” Blom said. He said Eskom had a massive wage bill and that the executives affected cost Eskom R50m a year. “Eskom needs to save more than R30billion a year, so it really is a drop in the ocean, but it is a start.
“The next step is for Eskom to cut the E-band managers from 600 to 40. After that they will start at the bottom. Many more job cuts are coming. If they do the job properly, they need to shave 35000 heads.
“Anything short of that will keep on threatening Eskom’s survival.” The National Union of Mineworkers in the Highveld region has reacted with anger to the top cuts.
“It is our determination to wage a war against these evil forces and ensure that Eskom retains its original form and shape. No one will be allowed to run Eskom as if it is his own spaza shop,” said the union’s Tshilidzi Mathavha.
Source: IOL News