Eskom headcount reduction

Deputy President David Mabuza has confirmed that Eskom has communicated its headcount reduction plan to government.

The Deputy President said this when he responded to oral questions in the National Council of Provinces.

“We can confirm that Eskom’s headcount reduction plan was communicated to government as a shareholder, and it forms part of updates that are shared by the utility with the Political Task Team on Eskom.

“Honourable Members would appreciate that restructuring a company of Eskom’s magnitude will not be an easy task, and may take longer, considering the potential effects thereof.

“Nevertheless, our position remains that Eskom must be supported to implement a comprehensive turnaround programme.

This will ensure that the utility develops and enhances its requisite institutional capabilities, to meet the country’s energy needs.”

The Deputy President said to this end, Eskom and government have committed to achieve headcount reduction as part of the turnaround programme, without embarking on retrenchments.

“Our understanding is that Eskom’s headcount reduction, as well as the cost reduction strategy that the utility started implementing in 2016, are amongst efforts aimed at improving the utility’s financial sustainability. It is envisaged that this would increase efficiencies in capital and operational expenditure, including employee benefits.”

He said that the restructuring process of Eskom into an efficient and financially sustainable entity, means that its turnaround and organisational transformation must be focused on achieving significant cost reductions and savings, while improving overall efficiencies across key cost drivers, such as expenditures on coal contracts and compensation of employees.

The Deputy President said Eskom’s headcount reduction is part of the power utility‘s 10 year Strategic Workforce Plan, which seeks to analyse and forecast the workforce that is required to execute the business strategy by enabling Eskom to identify, develop and sustain its workforce in support of its organisational objectives.

“Essentially, Eskom’s workforce will reduce from 44 929 to 40 691 by 2030, which will be achieved through natural attrition, retirements, limited replacement of attrition and voluntary separation packages.

“This is informed by a range of factors within business categories but most importantly, it prioritises replacement of critical skills, that is, engineers, artisans, technical officials, technicians and operators, through learner intake to offset the impact of attrition.

“The bulk of the reduction will still be achieved through attrition with 11 percent from voluntary separation packages. Simply put, Eskom’s historical attrition is projected to remain the same over the next 3 years, taking into account replacement of critical skills in operations.”

EFF MP from Limpopo Tirhani Mathevula had asked the Deputy President if, in his capacity as the Chairperson of the Eskom Task Team, he was informed of the recent revelations by the Eskom CEO that over the past year alone, they have reduced the Eskom workforce by about 2 000 and that a further 6 000 employees would still need to be released.

The Deputy President said Eskom has provided government with an overview of net attrition since the 2019 financial year, factoring in voluntary service packages, appointments for the year 2021, and projections up to year 2024 with a total of 6 074 employees to be released through voluntary severance packages and attrition.

“That being said, government advocates for Eskom’s headcount review to be in a manner that balances and matches business delivery outcomes, core skills and improved organisational performance.

“As government we will ensure that Eskom continues to invest in critical skills, as well as a long term pipeline of engineering and technical expertise.  

“Supporting Eskom is essential towards ensuring security of energy for our country. With energy security we will restore economic growth, increase employment, and improve the quality of life for all. Therefore, let us continue to work in unison towards these aspirations.”

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