A lesson to the ANC government – money has no loyalty

Many South African telecommunications companies have announced job cuts, which is a direct result of the tough economic conditions created by the Jacob Zuma government.

In September, Telkom announced it will start offering employees voluntary separation packages as part of a staff reduction initiative.

Less that three weeks later Liquid Telecom South Africa also announced job cuts, which the company said were needed to position it for future growth.

Other telecoms players like Internet Solutions have also cut staff in recent months, which shows that it is an industry-wide problem.

These job cuts come despite President Cyril Ramaphosa’s call on businesses to place a moratorium on job cuts.

He said his administration is trying to contain the fallout of a recession and institute measures to reignite growth in the country.

There is, however, a trust deficit when it comes to the ANC government’s statements.

Over the last decade, corruption, mismanagement, and an anti-business sentiment have destroyed South Africa’s economy and state-owned enterprises.

The party’s land expropriation without compensation plans have further hurt the economy, with many farmers and businesses questioning whether their property rights will remain protected.

A lesson everyone must learn

Commenting on Ramaphosa’s statements, Wayne McCurrie from FNB Wealth and Investments said there is a lesson which everyone must learn.

“Money has no loyalty. Money does not carry history. It goes to where the best returns are. You cannot compel money to where you want it to go,” he said.

Companies are looking for returns, and in a tough economic climate jobs cuts will follow to ensure future profits.

This is the reality which South Africa now faces, which saw 69,000 jobs lost in the country’s non-agricultural formal sector between March and June 2018.

Without economic growth more jobs will be on the line, and no political promises will be able to stem the losses.

Now read: Liquid Telecom SA’s digitally-enhanced operating model to lead to job losses

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A lesson to the ANC government – money has no loyalty