South Africa's Eskom plans executive layoffs to cut costs

The logo of state power utility Eskom is seen outside the Koeberg nuclear power plant near Cape Town, South Africa, March 20, 2016. REUTERS/Mike Hutchings

JOHANNESBURG (Reuters) – South Africa’s cash-strapped power firm Eskom has approved a plan to cut executives jobs as it struggles to bring down operating costs, the utility said on Wednesday, the first step in the firm’s proposed restructuring.

“Eskom’s operating costs have continued to increase dramatically while output has remained largely unchanged … As such, Eskom’s Board has approved a Section 189 process for its executive structure,” the firm said in a statement.

According to the Department of Labour’s website, section 189 outlines the steps a firm must follow when it is considering “dismissing one or more employees for reasons based on the employer’s operational requirements”.

Eskom spokesman did not answer phone calls and texts from Reuters seeking clarification on the number of jobs the planned layoffs would involve.

Eskom, supplier of more than 90 percent of South Africa’s electricity, has suffered years of mismanagement.

The utility reported a 2.3 billion rand loss for the latest financial year, and announced plans to shed around 7,000 staff from its bloated workforce over the next five years.

Reporting by Mfuneko Toyana

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