Eskom mulls cutting management team, pan-African expansion

JOHANNESBURG — Eskom’s board seems to be tiptoeing around cutting its staff numbers. Many people will probably be glad to see that the beleaguered company plans to trim its management team. This move will likely reduce costs, but it’s up in the air as to whether Eskom will need even more job cuts among its bloated workforce. But there’s something in this story that is sure to make many a South African gasp in disbelief and astonishment. Eskom is planning a broader pan-African expansion… – Gareth van Zyl

By Paul Burkhardt

(Bloomberg) – Eskom Holdings SOC Ltd. is considering reducing its executive committee and having fewer divisions, thinning out top management as the South African state-owned power utility aims to cut costs.

The electricity provider earlier this month said executives were being consulted over job cuts as it struggles with high debt levels and declining demand.

An electricity pylon stands beyond an Eskom sign at the entrance to the Grootvlei power station. Photographer: Dean Hutton/Bloomberg

One proposal would see the 10-member executive committee reduced to six, being operations, finance and services, human resources, legal and compliance, information technology, and procurement, according to a document seen by Bloomberg. These would report directly to the chief executive officer, it showed. IT and procurement offices would no longer be at the most senior executive level known as F Band, it indicated.

“We are not in a position to make any public pronouncements on our strategic review document until it has been shared with our principals and key stakeholders,” spokesman Khulu Phasiwe said.

Read also: SA at risk of ‘lights out’ as Eskom’s financial woes pile up

Reporting to operations would be seven units including distribution and transmission, which are currently at the higher level. New divisions would be group technology and Africa strategy, the document showed.

Eskom is also considering a new operating model, according to a separate document. While the initial focus of the project would be to move the power company toward long-term sustainability, it’s eventually aiming to become a “pan-African” utility, that document said.

The utility’s payroll, which has grown by more than a third in a decade, has come under scrutiny as executives and government officials consider options to revive the struggling company. Eskom has been identified as a key risk to South Africa’s economy by ratings companies.