More jobs on the line

Sibongile Mashaba

Sibongile Mashaba

The retrenchment barometer may go much higher this year with economists warning that more workers are expected to lose their jobs.

Some companies are facing reduced paid working hours due to the global financial crisis.

Before the end of last year more than 100000 jobs were quietly shed - car dealerships being the hardest hit, with one company retrenching 3000 people.

National Consumer Forum chairman Thami Bolani said: "Retrenchments are like throwing poverty right in people's faces. This means disaster for families because people will not be able to feed their loved ones.

"This is a very difficult time to cope considering the soaring food prices. The levels of unemployment will also go up and this will mean more social problems."

He said more people, including children, were likely to face a bleak future.

"Crime will sky rocket. People will lose their houses and will also be unable to pay for school fees," Bolani said.

He said people should seek advice before signing for retrenchment packages.

"They should also have a plan on what they are going to do with the money," he said.

Jorge Maia, an economist at Industrial Development Corporation, said: "A closer examination of the data reveals that the majority of job losses occurred in the informal sector of the economy, more specifically in the services related sectors. Job losses were reported in mining, manufacturing and a number of services sectors.

"Despite the enormous rescue and stimulus packages announced by several countries, world economic growth is expected to remain weak in 2009, with recessionary conditions prevailing in most advanced economies."

According to the Human Science and Research Council, South Africa already has an excessively high unemployment rate and just over half of its population lives in poverty.

"We can't afford more job losses," said André Snyman, chief executive of Consumer Assist.

"But many more people will lose work this year as the global financial crisis bites. There are ways to manage retrenchment without incurring more debt."

Snyman said Statistics South Africa revealed that more than 70000 jobs were lost to September last year, and retrenchments accelerated as the year ended.

The mining industry shed nearly 50000 jobs.

"The building industry is laying off workers as developers battle to get loans. And the construction of low-cost housing has declined by 70 percent," Snyman said.

Rand Merchant Bank has retrenched investment bankers, Absa is cutting 1210 jobs, Standard Bank has frozen posts and Nedbank will reduce its staff complement by 80.