We have to cut costs or the SABC may collapse, says CEO as almost 1000 jobs on the line


SABC CEO Madoda Mxakwe says that the public broadcaster's top management cannot let the SABC collapse due to its poor finances. 

Mxakwe was speaking about proposed retrenchments, cost cutting measures and the SABC’s financial situation at its Auckland Park headquarters in Johannesburg.

“As the executives, we are committed to ensuring that we turn around the SABC … do we do what is right, or do we let the SABC collapse?”

Mxakwe said the public broadcaster is "technically insolvent" and that ongoing cost cutting measures are not enough to put it back on a sound financial footing. 

"The SABC is technically insolvent ... we are not able to fulfil out financial obligations. If we were a public company we would have been recapitalised," he said. "The threat of commercial insolvency is increasing significantly."

The public broadcaster has recorded R3.2bn in revenue in the year to date, against expenditure of R3.5bn. The net loss in the year to date is R323m.  

On Monday the cash-strapped public broadcaster said that 981 employees may possibly be retrenched as a result of a restructuring to save costs, and it had issued notices to all staff informing them of its intention to proceed with Section 189 of the Labour Relations Act, which governs retrenchments. Out of its pool of 2400 freelancers, 1200 may be affected. 

The group's total permanent staff complement is 3 376. Of these 495 are in management. 

Cost savings 

"This exercise should result in a cost saving of approximately R440 million per annum, even at this preliminary stage. This amount excludes the projected cost savings from the planned reduction of freelancers," the SABC said in an earlier statement.

The public broadcaster said on Wednesday that it had submitted documentation to the Commission for Conciliation, Mediation and Arbitration for the appointment of a facilitator to oversee the Section 189 process.  

The group's Chief Operating Officer Chris Maroleng said that the SABC's turnaround plan was very simple; "it tries to maximise efficiencies".

He said that top management understood that the cost cutting measures had a direct impact on the people in the organisation. "We don’t take this lightly.”

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