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JOHANNESBURG - Power utility Eskom is planning to reduce its workforce by more than 10000 heads through natural attrition as it battles to find ways to cut its employee costs.

In its 2017 annual report, Eskom said it planned to reduce its overall headcount to 36746 by 2021/22 from the current 47658.

Spokesperson Khulu Phasiwe said retrenchments were, however, not on the cards. “We are not even talking about retrenchments,” Phasiwe said.

Eskom has been under pressure from, among others, the National Energy Regulator of South Africa to reduce its headcount to cut costs.

A 2016 World Bank Study of Utilities in Africa, which considered the staffing data for 36 countries, said that Eskom was overstaffed by 27500. Eskom’s headcount was 47658 in March last year compared to 47978 during the corresponding period in 2016. The figures included permanent staff and fixed-term contractors.

“We have reviewed the workforce plan, focusing on retention of core, critical and scarce skills across the business, while reducing non-essential positions,” Eskom said. In the annual report, Eskom counted reducing manpower costs and headcount among its focus areas.

Wayne Duvenage, chairperson of the Organisation Undoing Tax Abuse (Outa), said Eskom was overstaffed. He said the power utility needed to enter into negotiations with unions to discuss the process. He said Eskom’s headcount was 32 224 in 2006 when its energy output was 222 Terawatt hours (TW/* ). Instead of increasing, the utility’s output dropped to 220TW/* last year, he said.

“It really is a tough situation to be in to have to cut headcount under these high unemployment conditions, but unless Eskom or the government wants to regard itself as an ‘employment bureau,’ it needs to display or explain why it should be allowed to reduce its people productivity from 6.6gigawatt hours (GW/* ) per person 10 years go, by 32percent to 4.5GW/* for its current headcount, which stood at more than 47000 in 2017.

“This in itself equates to around 15000 too many heads. If it is able to reduce its headcount over time to the prior productivity levels, then Eskom could save around R10billion per annum at today's salary costs,” Duvenage said.

He said natural attrition was not the right way to reduce Eskom’s overstaffing, saying it would take too long to achieve the desired cost-cutting. The process could see Eskom lose the wrong people, while retaining “highly paid and unproductive” head office staff.

“Natural attrition is not the only solution, but could be part of a broader staff reduction plan, along with early retirement packages and other measures,” he said, adding that people productivity in any industry should improve over time, “if the entity is to display that it is improving its output efficiency, along with being innovative.”

Duvenage said Eskom should aim for past productivity levels. “In 2006, that figure was 6.6GW/* per person. In simple terms, they should benchmark with their own best output per unit over the past decade and if 6.6GW/* per person per annum is that figure, their headcount needs to reduce to around 32000 staff,” he said.

- BUSINESS REPORT