Memo reveals Eskom restructuring plan - TechCentral

Memo reveals Eskom restructuring plan

Image: Steve Buissinne

Eskom is proposing executive job cuts and a reorganisation of management units in an effort to improve the utility’s financial position, according to a document seen by Bloomberg.

Eskom, which produces about 90% of the nation’s electricity, hired Boston Consulting Group earlier this year to help develop long-term strategic plans for the company, and Lazard for financial advisory services. The internal memo has been informed by their input.

The utility proposes a new leadership structure and plans to reduce the number of the most senior executives, a level known as F-Band employees, based on international benchmarks and comparisons to similar electricity companies reviewed by Boston Consulting and a Lazard report, according to the document. Eskom’s own strategy work along with consultancy findings were considered “as a basis for recognising that a restructure at executive level is warranted”, the memo says.

Eskom is struggling with high debt and declining demand for power as it takes steps to emerge from multiple scandals involving graft and mismanagement. The company expects to announce a previously delayed strategic plan at the end of November.

Eskom confirmed on Friday that a job dismissal process was proceeding for F-Band employees due to a new executive structure. Khulu Phasiwe, a spokesman for the utility, didn’t immediately respond to a message seeking comment.

The proposed changes will merge the roles of group executive distribution and group executive customer service to increase accountability, according to the plan. Group executives for generation, transmission, distribution and capital will report to the chief operating officer instead of the CEO, as is currently the case.

The heads of IT and procurement will be demoted to E-Band general managers, the document said. This will also be the case for the heads of strategy, risk and sustainability, security, audit and forensics, and corporate affairs, reflecting “the reality that these are support positions that do not necessarily reflect the complexity and seniority necessary to be F-Band positions”.  — Reported by Paul Burkhardt, (c) 2018 Bloomberg LP