SAA could lose fifth of its workforce: Restructuring begins at SOE

SAA could lose fifth of its workforce: Restructuring begins at SOE

- Over 5 000 South African Airways employees have been warned of potential job cuts

- This comes as the state-owned entity engages in a restructuring process

- The retrenchments may affect nearly 1 000 employees, according to the airline's acting CEO

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South African Airways has announced that it will be embarking on a restructuring process.

The embattled SOE has warned staff that retrenchments could affect around 1 000 employees.

Acting CEO Zuks Ramasia commented on the situation, confirming the possible cuts:

"Our continued losses and reliance on government guarantees to borrow money from lenders, have increased the interest costs which impacts the operating cost of the business."

The restructuring could see a fifth of the airline's labour force let go, excluding SAA subsidiaries like Mango Airlines and SAA Technical, Fin24 reports.

READ ALSO: Business News: 900 jobs lost as ArcelorMittal closes Saldanha plant

Ramasia has noted that a consultation process is underway in accordance with the Labour Relations Act.

The interim CEO says that the entity is facing liquidity issues and the inability to continuously loan funding without servicing debts.

Economist Dr Azar Jammine says that South African banks are wary of lending funds to SAA:

"The commercial banks have been getting a bit sticky about lending money to SAA without the necessary (state) guarantees because of the huge losses the airline made."

Briefly.co.za reported that ArcelorMittal South Africa has been forced to scale down steel operations at Saldanha in light of financial difficulties. 900 employees have been let go as part of a strategic operational review. The Saldanha plant has been found lacking when it comes to competitive advantage in the export market.

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Source: Briefly.co.za

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