Transnet begins job cuts process through voluntary packages

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Transnet's fixed labour cost accounted for 67% of total costs.
Transnet's fixed labour cost accounted for 67% of total costs.
  • Transnet has moved to the next phase of its process of issuing voluntary severance packages. 
  • The company said its voluntary severance package process was open to all permanent employees.
  • Transnet said its fixed labour cost for the company account for 67% of total costs and this was unsustainable.

Transnet has moved to the next phase of its process of issuing voluntary severance packages (VSPs) after the state-owned freight and logistics company closed the application process earlier this month.

This comes after Transnet introduced the process in August in a bid to reduce costs on the business and ensure "long-term sustainability". Minister of Public Enterprises Pravin Gordhan said recently that the entity would be undergoing changes to reform and improve efficiencies.

In a statement issued on Wednesday afternoon, Transnet said this process was open to all permanent employees in all areas of the business. The company said Transnet's fixed labour cost accounted for 67% of total costs.

"The analysis of the uptake will give Transnet a picture of where the company should focus in re-allocating, re-deploying and enhancing current skills and roles to ensure continued operations.

"Transnet has put adequate processes in place to ensure that its highly-skilled work force is preserved, particularly in areas where those skills are scarce and critical to the operations of the business," the statement read.

According to Transnet, critical skills will be preserved through mentoring and skills-transfer programmes focused on mentoring and transferring of critical skills.

"These include the Transnet Leadership Development programme, which seeks to build leadership capabilities and skills at managerial levels. Transnet has also recently introduced the Silver Fox programme, which encourages employees who have been with the company for many years to transfer skills and knowledge to younger employees." 

While Transnet did not say how many employees would be affected by this process, the United National Transport Union (UNTU) charged that the process granted VSPs to "all of almost 2 919 Transnet employees who applied".

"Amongst these employees are 200 train drivers, crane and lifting operators and artisans who are considered scarce skills in Transnet," the UNTU statement said.

UNTU secretary general Steve Harris said 42% of the employees leaving Transnet have more than 26 years of service and 41% of them have between ten and 26 years of service.

Transnet CEO Portia Derby said four of the individuals who applied for the VSPs were in chief financial officer positions, and that Transnet only stood to save 7.7% on its wage bill.

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