Eskom drops axe on executives in effort to trim costs

Eskom is in the process of retrenching some of its employees.
Eskom is in the process of retrenching some of its employees.

Embattled power utility Eskom has announced that it would be retrenching some its executives in an effort to enhance operational and cost efficiencies.

The power utility has Eskom has about 25 executives and more than 400 senior and general managers.

The state-owned utility said in a statement released on Wednesday that “despite its efforts to curb expenditure, Eskom’s operating costs have continued to increase dramatically while output has remained largely unchanged”.

“Eskom's board of directors has decided to review the company’s organisational design to enhance operational and cost efficiencies. The board has approved a section 189 process for its executive structure [F bands]. Only members of the executive structure will be impacted,” read the statement.

Eskom has over-indulged in the last 10 years, where it amassed almost 16 000 additional employees as other companies trimmed down. It now has 207 more senior managers and executives than it had 17 years ago. Numsa has rejected the move saying the trade union was not consulted.

Phakamile Hlubi-Majola, the spokesperson for National Union for Metalworkers of South Africa (Numsa), said they believed that looting and corruption were a much bigger problem at the power utility.

“We reject any attempt to reject our members at Eskom... no consultation has taken place on this matter,” she said.

The company’s bloated structure had been blamed by economists and business analysts for its current financial difficulties.

All three labour unions at Eskom - National Union of Mineworkers, Numsa and trade union Solidarity - have among others raised the issue of too many executives at the company during the protracted wage increase negotiations a few months ago.

The cash-strapped utility revealed to Sowetan at the time that it had 32 674 employees in 2007, but that figure had ballooned to more than 48 500 workforce which had grown at a staggering average of 1 595 a year over 10 years.

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