Ramaphosa begs South African companies not to sack workers

President Cyril Ramaphosa of South Africa on Monday urged companies planning to cut jobs to balance the sustainability of business and the livelihoods of workers despite being hard hit by COVID-19.

“As much as we seek to protect current jobs, we also need to create new ones, and attract new, greater levels of investment,” Ramaphosa said in his weekly address to the nation.

He stressed the importance of opening avenues for self-employment and entrepreneurship, especially for young people.

The president was speaking after a number of companies last week announced plans to retrench staff.

From aviation to construction, from entertainment and leisure to hospitality, companies have indicated their intention to cut staff because of heavy losses incurred over the past three months.

In some cases, businesses are closing permanently.

Small businesses whose turnover has been wiped out will be even harder hit.

“As a country, we have all been keenly aware of the consequences of shutting down economic activity during the lockdown that was absolutely critical to save the lives of our people,” Ramaphosa said.

A “job loss tsunami” has taken place around the world, and South Africa is no exception, he said.

In April the International Labour Organisation forecast that there would be around 305 million job losses worldwide.

The situation of workers in the informal economy is even worse, with an estimated 1.6 billion workers in danger of losing their livelihoods.

For South Africa, which was already facing an unemployment crisis and weak economic growth, difficult decisions and difficult days lie ahead, Ramaphosa warned.

“We would urge that the difficult decisions to be taken are taken with care and with due regard to balancing the sustainability of companies and the livelihoods of workers,” he said.

It is important that whatever is done is underpinned by ensuring a just transition to all concerned, Ramaphosa said.

The government has taken measures to protect local businesses during the lockdown in the form of loans, tax relief, debt restructuring, extended credit lines, and retail rental exemptions are continuing to provide vital support, he said.

Temporary social assistance to poor households is gathering pace and providing vital relief, Ramaphosa said.”However, these measures can only go so far,” he said.

Ramaphosa urged the government, businesses, labor and civil society to deepen their collaboration as never before in driving the national recovery effort.

“We remain optimistic that as we gradually return to normalcy, and as we forge ahead with the economic reform measures embarked upon earlier this year, the growing investment levels we were seeing before coronavirus hit will slowly but surely return,” the president said.