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Concise report: Retrenchments in 2015 – some indications

Tuesday, August 18th, 2015

By Gerhard van Onselen, Solidarity Research Institute

Introduction

A wave of retrenchments is currently flooding the South African economy. It is well known that thousands of posts at a number of large companies are involved, e.g. 9 000 at Telkom; 4 500 at Lonmin; 1 200 at ArcelorMittal, but unfortunately, the crisis goes deeper. Although accurate and comprehensive numbers cannot be determined, this concise report indicates, based on the information available, that the current gust of retrenchments is reaching crisis dimensions.

The most important findings in this concise report are:

  1. From media reports and members’ feedback, Solidarity is currently aware of retrenchments at 220 employers at the very least.
  2. From media reports alone, it seems that more than 45 000 positions have already been implicated in staff reduction processes this year.
  3. Local employee confidence is at the lowest level it has been since the Solidarity Research Institute started with surveys in the first quarter of 2013.
  4. Job security in South Africa has weakened over the last four years.
  5. Solidarity handled 80% more retrenchment-related enquiries of members in June and July 2015 compared to the same period last year.
  6. Year to date, 15% more member enquiries and requests for advice and litigation have been referred to Solidarity’s Legal Services compared to the same period in 2014.
  7. The mining sector represents the biggest danger for the labour market measured by the possible impact on workers. The telecommunications industry and the steel and metal industry are further important role players where retrenchments are concerned. A number of government institutions and parastatals, such as Telkom, the South African Post Office, SAA, Eskom and PetroSA proportionally play a large part in the obvious retrenchment crisis.

The Solidarity Research Institute consulted the following four sources for the purpose of this Concise report:

  1. The Solidarity -ETM Labour Market Index;
  2. Media reports on retrenchment processes in 2015;
  3. A special electronic survey among Solidarity members; and
  4. Statistics from Solidarity’s call centre (enquiries by phone) and Legal Services Division.

The complete report is available for download at the following link

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