Jobs bloodbath in South Africa

While a handful of South Africa’s large telecommunications and technology companies increased their staff headcount this year, a MyBroadband analysis showed that more than 11,000 jobs were lost in the sector.

This is in line with a newly-released report from PwC, which stated that South Africa lost close to 1.4 million jobs in 2020.

“There were some seasonal factors involved, with the first quarter usually seeing the end of temporary holiday jobs in e.g. retail,” PwC said.

“Nonetheless, the official (narrowly defined) unemployment climbed from 32.5% in 2020Q4 to a new record high of 32.6% in 2021Q1.”

PwC said that this latest reading of South Africa’s unemployment rate is the second-highest up-to-date unemployment reading in the world after Bosnia & Herzegovina, which was 33.4% in 2021Q1.

As bad as the situation in South Africa is, PwC said that the increase in the unemployment rate was less than economists feared.

“This is attributed to some 200,000 people who were looking for work in 2020Q4 shifting to the discouraged workers category — in other words they have given up on finding a job by 2021Q1,” it noted.

“These people likely lost their jobs during the strictest levels of lockdown last year and were searching for a new job during the second half of 2020,” said PwC.

“In the absence of success, they have given up on again finding employment — and giving up means you are not included in the unemployment rate calculations.”

As a result, South Africa’s expanded unemployment rate — which includes discouraged workers — increased from 42.6% in 2020Q4 to 43.2% in 2020Q1.

Stated differently — one in twelve jobs were lost compared to a year earlier.

“This will compound the existing challenges seen prior to the pandemic in creating enough value-adding jobs in South Africa,” PwC stated.

PwC commented last year that the country’s key challenges (poverty, unemployment and inequality) have now become more severe through the pandemic and to address them will require government to take an entirely new approach.

It is not all bad news, PwC said.

“Our economic forecasts suggest South Africa will recover 444,710 jobs in 2021,” it said.

However, this number could have been closer to 650,000 had it not been for the impact of load-shedding.

To see how technology jobs in South Africa have been impacted, MyBroadband looked at the latest employee information disclosed in the financial reports of JSE-listed ICT companies and state-owned enterprises (SOEs).

The following table summarises the findings of our analysis.

Employee headcount at South African SOEs and tech companies
Company 2020 2021 Jobs lost/gained % change
Vodacom 7641 7,642 1 0.01%
MultiChoice 6894 7,028 134 1.9%
SABC 3167 2,979 -188 -5.9%
Broadband Infraco 155 155 0 0%
Telkom 15099 12,039 -3,060 -20.3%
Eskom 46665 43,795 -2,870 -6.2%
Sentech 531 506 -25 -4.7%
MTN 19288 19,295 7 0.04%
EOH 10578 7,333 -3,245 -30.3%
Adapt IT 1088 1,117 29 2.7%
Denel 3696 3,332 -364 -9.8%
Mustek 960 984 24 2.5%
Reunert 6220 5,747 -473 -7.6%
Altron 9113 7,711 -1,402 -15.4%
Total jobs lost -11,432 -8.7%

Now read: Tech companies in South Africa that pay the highest salaries

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Jobs bloodbath in South Africa