Close Menu
TechCentralTechCentral

    Subscribe to the newsletter

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    Facebook X (Twitter) YouTube LinkedIn
    WhatsApp Facebook X (Twitter) LinkedIn YouTube
    TechCentralTechCentral
    • News

      World Bank set to back South Africa’s big energy grid roll-out

      20 June 2025

      The algorithm will sing now: why musicians should be worried about AI

      20 June 2025

      Sita hits back at critics, promises faster, automated procurement

      20 June 2025

      The transatlantic race to create the first television

      20 June 2025

      Listed: All the MVNOs in South Africa – 2025 edition

      19 June 2025
    • World

      Watch | Starship rocket explodes in setback to Musk’s Mars mission

      19 June 2025

      Trump Mobile dials into politics, profit and patriarchy

      17 June 2025

      Samsung plots health data hub to link users and doctors in real time

      17 June 2025

      Beijing’s chip champions blacklisted by Taiwan

      16 June 2025

      China is behind in AI chips – but for how much longer?

      13 June 2025
    • In-depth

      Meta bets $72-billion on AI – and investors love it

      17 June 2025

      MultiChoice may unbundle SuperSport from DStv

      12 June 2025

      Grok promised bias-free chat. Then came the edits

      2 June 2025

      Digital fortress: We go inside JB5, Teraco’s giant new AI-ready data centre

      30 May 2025

      Sam Altman and Jony Ive’s big bet to out-Apple Apple

      22 May 2025
    • TCS

      TCS+ | AfriGIS’s Helen Hulett on how tech can help resolve South Africa’s water crisis

      18 June 2025

      TechCentral Nexus S0E2: South Africa’s digital battlefield

      16 June 2025

      TechCentral Nexus S0E1: Starlink, BEE and a new leader at Vodacom

      8 June 2025

      TCS+ | The future of mobile money, with MTN’s Kagiso Mothibi

      6 June 2025

      TCS+ | AI is more than hype: Workday execs unpack real human impact

      4 June 2025
    • Opinion

      South Africa pioneered drone laws a decade ago – now it must catch up

      17 June 2025

      AI and the future of ICT distribution

      16 June 2025

      Singapore soared – why can’t we? Lessons South Africa refuses to learn

      13 June 2025

      Beyond the box: why IT distribution depends on real partnerships

      2 June 2025

      South Africa’s next crisis? Being offline in an AI-driven world

      2 June 2025
    • Company Hubs
      • Africa Data Centres
      • AfriGIS
      • Altron Digital Business
      • Altron Document Solutions
      • Altron Group
      • Arctic Wolf
      • AvertITD
      • Braintree
      • CallMiner
      • CYBER1 Solutions
      • Digicloud Africa
      • Digimune
      • Domains.co.za
      • ESET
      • Euphoria Telecom
      • Incredible Business
      • iONLINE
      • Iris Network Systems
      • LSD Open
      • NEC XON
      • Network Platforms
      • Next DLP
      • Ovations
      • Paracon
      • Paratus
      • Q-KON
      • SevenC
      • SkyWire
      • Solid8 Technologies
      • Telit Cinterion
      • Tenable
      • Vertiv
      • Videri Digital
      • Wipro
      • Workday
    • Sections
      • AI and machine learning
      • Banking
      • Broadcasting and Media
      • Cloud services
      • Contact centres and CX
      • Cryptocurrencies
      • Education and skills
      • Electronics and hardware
      • Energy and sustainability
      • Enterprise software
      • Fintech
      • Information security
      • Internet and connectivity
      • Internet of Things
      • Investment
      • IT services
      • Lifestyle
      • Motoring
      • Public sector
      • Retail and e-commerce
      • Science
      • SMEs and start-ups
      • Social media
      • Talent and leadership
      • Telecoms
    • Events
    • Advertise
    TechCentralTechCentral
    Home » News » Mass retrenchments to hurt limping economy even more

    Mass retrenchments to hurt limping economy even more

    By Agency Staff22 January 2020
    Twitter LinkedIn Facebook WhatsApp Email Telegram Copy Link
    News Alerts
    WhatsApp

    Less than a month into 2020, South African companies have already announced thousands of job cuts. In a country where a third of the labour force is already unemployed, this will put even more strain on demand and economic growth.

    Almost 8 000 jobs are at risk as companies including Telkom, the country’s largest fixed-line operator, and Walmart’s local unit Massmart plan to reduce their headcount after slumps in earnings. That’s after Sibanye Gold cut positions at its Marikana operations as part of restructuring plans and Glencore issued a notice of possible reductions at its Rustenburg ferrochrome smelter.

    If realised, these job losses will add to an unemployment rate that is the highest in at least 11 years, and place a further damper on demand and consumption spending in an economy stuck in the longest downward cycle since World War 2. Growth in household expenditure, which makes up 60% of economic activity, slowed to 0.2% in the third quarter despite a reduction in the benchmark interest rate.

    I worry that if we see more of these kinds of announcements it could further depress household consumption expenditure

    “Labour market dynamics — job growth, income growth — are the most important drivers of consumption expenditure,” said Miyelani Maluleke, a senior economist at Absa. “I worry that if we see more of these kinds of announcements it could further depress household consumption expenditure.”

    An economic blueprint that President Cyril Ramaphosa co-authored a decade ago aims to reduce joblessness to as little as 6% by 2030, but the government’s actions are not helping. In addition to a lack of urgency in implementing policies that’ll boost growth and convince businesses to invest and expand, the state and its companies are also reducing workers.

    Finance minister Tito Mboweni has made it clear the state wage bill has to be trimmed, and that means a government that employs fewer people. Despite opposition from labour unions, the restructuring of power utility Eskom, which has billions of dollars of debt and a bloated workforce, will lead to job cuts when it eventually happens. The national carrier, South African Airways, is in bankruptcy protection and started cancelling flights on Tuesday to save cash, a step that could usher in a reduction in staff.

    Outpacing GDP

    South Africa’s unemployment rate has remained above 20% for at least two decades, largely due to insufficient economic growth. Since 2015, population growth has outpaced that in GDP every year.

    That means the economy “doesn’t even begin to scratch the surface of what is required in terms of jobs for new entrants in the labour market”, Maluleke said. “As a result I think you’re going to see the employment rate grow.”

    South Africa’s economy hasn’t expanded by more than 2%/year since 2013 and neither the central bank nor national treasury see it reaching that level by 2022.

    The economy needs sustained GDP growth of 2.5-3% to stabilise and to reduce the unemployment rate, Maluleke said.  — Reported by Prinesha Naidoo, with assistance from Renee Bonorchis, (c) 2020 Bloomberg LP



    Absa Cyril Ramaphosa DionWired Massmart Miyelani Maluleke Telkom top
    Subscribe to TechCentral Subscribe to TechCentral
    Share. Facebook Twitter LinkedIn WhatsApp Telegram Email Copy Link
    Previous ArticleCheaper iPhone model to debut within months
    Next Article Naspers to sell Prosus shares to attract more investors

    Related Posts

    Listed: All the MVNOs in South Africa – 2025 edition

    19 June 2025

    MTN CEO edges Vodacom rival in pay stakes – but just barely

    18 June 2025

    TechCentral Nexus S0E2: South Africa’s digital battlefield

    16 June 2025
    Company News

    Making IT happen: how Trade Link gears up to enable SA retail strategies

    20 June 2025

    Why parents choose CambriLearn for online education

    19 June 2025

    Disrupt first, ask questions later – the uncomfortable truth about incident response

    18 June 2025
    Opinion

    South Africa pioneered drone laws a decade ago – now it must catch up

    17 June 2025

    AI and the future of ICT distribution

    16 June 2025

    Singapore soared – why can’t we? Lessons South Africa refuses to learn

    13 June 2025

    Subscribe to Updates

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    © 2009 - 2025 NewsCentral Media

    Type above and press Enter to search. Press Esc to cancel.