The SABC office in Auckland Park, Johannesburg. Picture: SUNDAY TIMES
The SABC office in Auckland Park, Johannesburg. Picture: SUNDAY TIMES

 The SABC on Tuesday said it remained in a dire financial state and would probably be unable to pay salaries and service providers in the coming months.

The broadcaster said it had no choice but to cut jobs to remain viable.

SABC executives told MPs the broadcaster needed a cash injection of at least R3bn to stay afloat. However, the  Treasury has not acceded to the SABC’s request for yet another government guarantee.

The request was submitted more than a year ago, said board chairman Bongumusa Makhathini, who warned the broadcaster could collapse and fail to pay salaries and service providers by March 2019 should the current financial crisis not be addressed urgently.

SABC executives had a tough time in Parliament on Tuesday trying to explain the need for job cuts at the troubled public broadcaster. The SABC executives were briefing Parliament’s communications portfolio on the proposed retrenchments.

MPs across the political spectrum indicated they were opposed to the planned retrenchments at the SABC which are likely to affect close to 1,000 permanent employees and 1,200 freelancers.

The bickering over the retrenchment exercise is set to test the resolve and independence of the SABC executives. The SABC board has in the past been hampered by political interference leading to the collapse of previous boards, which is said to have contributed to the financial mess.

The SABC, which recorded a net loss of R622m in the financial year ended March, is in the midst of a crippling financial crisis. It spends more than R3bn a year on the salaries of slightly more than 3,000 permanent employees. It currently has a R1.3bn debt and generated R7.2bn in revenue in the financial year that ended in March. In 2017 it reported a net loss of more than R1bn.

It expects a net R805m loss in the 2018-2019 financial year, should drastic cost cut measures not be implemented. SABC group executive for human resources, Jonathan Thekiso said  job cuts were unavoidable.

“The SABC has already embarked upon several cost-cutting measures, but there is simply no manner in which a complete organisational wide restructuring and reduction of positions can be avoided, and with it, the issue of possible retrenchments are regrettably contemplated,” said Thekiso.

He also said the SABC had uncovered a number of irregular promotions and salary increases by the previous executives which resulted in the inflation of the salary bill. The SABC was over-staffed and the wage bill was inflated when freelancers were hired to do jobs  that could be done by a permanent employees, said Thekiso.

He said the broadcaster could save about R150m by letting go 1,200 freelancers out of the current 2,400. Retrenching close to 1, 000 permanent staff could save the SABC about R440m a year. The broadcaster hopes to conclude the process by the end of January, and it says senior executives will also be affected. UDM MP, Nqabayomzi Kwankwa, said SABC executives seemed to have already made up their minds that jobs have to be cut, a process which would affect lower level workers the most, and the CCMA process was just a cover up. DA MP and communications spokesperson, Phumzile van Damme, said she would not back job cuts until independent skills and salary audits were conducted. Committee chairperson Hlengiwe Mkhize urged SABC executives to come up with other alternatives to cut costs. 

phakathib@businesslive.co.za