The SABC plans to retrench hundreds of employees to cut costs and create a modern, agile, and future-focused broadcaster.
This is according to a report in the Sunday World, citing a confidential document titled “Reimagine the SABC through a new operating model”.
According to the report, the retrenchments are aimed at cutting the SABC’s salary bill by R700 million to create a more sustainable organisation amidst dwindling advertising revenues.
“We have determined that, in order to break even within the current fiscal year, a R700-million reduction in employee compensation is necessary,” the document states.
It is understood that the need to cut costs was aggravated by the COVID-19 pandemic – which has placed additional pressure on the media industry.
The Communication Workers Union (CWU) and the Broadcasting, Electronic, Media & Allied Workers Union (BEMAWU) have expressed concerns about the retrenchment plans.
SABC relying on bailouts
The SABC has been in dire straights for years and has been receiving bailouts from the government to make ends meet.
The SABC recently confirmed to MyBroadband that it has received the final R1.1-billion payment of the R3.2-billion bailout it was allocated by the government last year.
The SABC received the initial R2.1 billion in October 2019, with the remaining R1.1 billion to be transferred once the SABC had met a number of conditions set by the National Treasury.
The SABC said the money received would be used on three key priorities, as outlined by the board, National Treasury, and the Department of Communications and Digital Technologies:
- Paying the SABC’s creditors.
- Investment in content acquisition.
- Maintenance of the SABC’s infrastructure and critical broadcast equipment.
Experts told MyBroadband that the R1.1 billion is absolutely necessary to ensure the SABC can survive.
“Historically, the broadcaster has been battling to meet its financial commitments, and at the end of its 2019 financial year the corporation was technically insolvent – failing to make payments to vendors, creditors, as well as content providers,” said Africa Analysis analyst Nozi Dikgale.
Dikgale added that the coronavirus pandemic will cause the SABC to incur additional costs relating to COVID-19 compliance.
Media Monitoring Africa’s William Bird added that the COVID-19 crisis is likely to hurt the SABC significantly.
“With broadcasters saying they have lost up to 60% revenue, I really doubt the SABC will be able to operate and meet its public mandate conditions without serious cuts to their operations,” said Bird.
South African National Editors’ Forum executive director Kate Skinner said the SABC will be forced to look at staff retrenchments to address its financial situation.
Planned retrenchments previously stopped
This is not the first time the SABC has planned to retrench staff to cut costs, but it has always been stopped by the government in the past.
In 2018, the broadcaster issued a notice to staff stating that it will retrench 981 permanent employees and 1,200 freelancers in an effort to save costs.
In 2019, the issue made headlines again when the SABC planned to close five offices, cut a third of its staff, and reduce management by 37% to turn the ailing company around.
These planned jobs cuts did not transpire and the SABC instead relied on a R3.2-billion bailout from the government to continue operating.
The SABC now plans to restructure by implementing a new “Target Operating Model” to reach financial stability and become self-sufficient.
TV with Thinus reported that the SABC has been severely impacted by the ongoing economic downturn, changing consumer needs, and rapid technological advancements.
“The newly-developed target operating model enables the SABC to reinvent itself, review its business model and revenue portfolio, and to holistically reassess its input costs as well its resource capacity,” the SABC said.
This process, SABC CEO Madoda Mxakwe said, is aimed at “ensuring the long-term existence of a resilient and sustainable public broadcaster”.