Eskom starts offering managers voluntary exit packages

R400m budget allocated to the plan.
Image: Waldo Swiegers, Bloomberg

South Africa’s debt-stricken power utility Eskom Holdings SOC Ltd. began offering managers voluntary severance packages as part of a program to cut costs.

The board allocated a budget of R400 million to the plan, the Johannesburg-based utility said in a statement on Thursday, confirming an earlier report by Bloomberg. It expects to recoup that amount through savings within a year, according to the statement.

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

Eskom is cutting jobs as it grapples with a R450 billion rand debt burden. Its headcount fell to 46 665 employees in 2019, about 4% lower than the previous year, but wider staff cuts have been resisted by labor unions.

The voluntary separation package program excludes workers below managerial level, the utility said.

Staff levels remain close to what they were when a World Bank study in 2016 found that Eskom was potentially 66% overstaffed. The workforce has grown more than 23% in the past decade as the business has become loss-making and dependent on government bailouts.

The voluntary packages will be open for managers in non-core positions and those who are 60 to 62 years old, regardless of whether they’re in core, critical or non-core positions, according to an Eskom document seen by Bloomberg. Applications will start in the third week of February, with the exits planned by the end of April, subject to Eskom’s discretion, it said.

© 2020 Bloomberg L.P.

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It’s not fixing the problem Eskom! Eskom must get rid of all staff who are not qualified for their positions and who got their jobs via “fronds” and not for their skills…

I Concur with Oracle. Then they must retrench those that needs to be retrenched. In the name of ‘restructuring’. Eskom must stop pussyfooting around and get serious. One do not give a 60 – 62 year old employees sweeteners to resign. They are on the edge of retirement anyway.

Eventually the penny was forced to drop. If Eskom were managed like any other private big business, the process of instilling proper efficiencies, curtailing development over-runs, right sizing, restructuring remuneration and staff compliment to be fit for purpose and market related, plugging the leakage holes, attending to effective maintenance and killing all corruption attempts, etc – it would undoubtedly have prevented the catastrophic situation Eskom finds itself in. Furthermore it would not have been necessary for the over-extended tariff increases or to fight with your regulator in court for higher rate increases due to their financial distress brought about by their own inabilities and self destructive resistance to necessary change.

Private Big Business is worse than these SOE’s. The thing is, they can hide their rotten froth because they are run by a close cabal that is too powerful to expose or may not allow themselves to be discovered… But all those who understand business, we know that the shenanigans taking place in SOE’s were learnt from or perfected in the business space. Where does the SOE’s get their CEO’s from?…. surely not from Robbin Island.

No question, But that still doesn’t alter the fact that Eskom is 66% overstaffed by world standards.

Mostly nonsense, if a private business was losing billions annually due to pure incompetence then it would have been folded up and gone ages ago.

Yes, business can break laws and be corrupt etc but firstly that is private money and their problem and secondly the scale we have seen with SOEs is just ridiculous.

And there go the last engineers escaping the toxicity….

The problems with packages are the good people will leave and find another job or consult back. The deadwood will remain behind because they are actually unemployable elsewhere. They sit around all day looking for an opportunity to get something for nothing and wait to go home.

Inadvertently they are all deadwood…

The age quoted 60-62 & regardless of position I hope this isn’t another targeted loss of much needed “Institutional memory/competence”

Brilliant move! Get rid of all the experience then it can be run by all the 30% matrics. What could go wrong?

Voluntary exit packages never works due to the fact that folks who tend to go for them are skilled professionals as they know that they will find a new job easy or open their own consulting businesses.

All the dead wood tend to stay. So this will not fix the problem

all the screw-ups in every sphere in totality of the SOEs…. and wait for it TONITE….. all the excuses!!! & the plans & jobs!!!

extract from some reporters… ”
Contrary to what Eskom is telling South Africans, the real reason for the current load-shedding is its poorly-skilled staff and a subsequent decline in the adherence to standards of operating practices.”

What ever happened to last in first out?

Doesn’t apply to SOEs who can’t really do anything.

With any restructuring, the first step is to offer an early retirement or VSP (voluntary severance package). Thereafter, depending what further cost savings are needed, one can look at either letting, say 10 people apply for 5 positions according to the new structure, or consider LIFO (last in…).

If they managed their KPIs they would not have to offer packages to 60% of them

Does Eskom or any SoE work on KPI’s – I thought they all stopped this when Dr Maree stepped down

Hmmm…………….. could it be a 59yr old’s master plan to retire with a “voluntary severance package”
(if the decision was left to any one within the 59-62yr old age bracket, perhaps someone could shed some light on who made this decision?, oh thats right this is South Africa, of course not!)

wow, imagine being paid to leave because you are either not fit for purpose or surplus to purpose… JZ is sitting in Cuba smiling while SA drowns in debt, in years or decades to come someone will tally up the cost of his time at the helm and I’m sure it will be BIGLY !! the graph above showing the spike in the number of staff v unprofitability is a metaphor for SA in its entirety. it may not help SA financially, but I’d feel a lot better if JZ was in a prison cell and not a hotel

End of comments.

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