Picture: SUNDAY TIMES
Picture: SUNDAY TIMES

The SABC announced on Thursday that it is halting moves to retrench more than 2,000 permanent staff and freelancers, pending a skills audit.

The retrenchment process, which the public broadcaster initially hoped would be concluded by the end of January, was seen as crucial to cut costs and restore its finances.

The SABC, the primary source of news and entertainment for millions of South Africans, warned in November that it would be unable to pay salaries by February, unless a R3bn guarantee was secured from government.

Asked whether the broadcaster would be able to pay salaries and meet other key obligations in the coming months, SABC spokesperson Neo Momodu said the broadcaster remained in a difficult financial position. "The financial situation is still strained.

"We continue to engage [with the government] with the help of various stakeholders about the application for a government guarantee. This is ongoing and at this stage we’re not saying where we are," Momodu said.

She had said earlier that the decision to halt retrenchments followed engagement with various stakeholders, including the parliamentary portfolio committee on communications, organised labour and the broadcaster’s employees.

Hlengiwe Mkhize, chair of parliament’s communications committee, welcomed the decision. While noting that the SABC is overstaffed and that a number of cost-cutting measures that were put in place did not yield desired results, Mkhize reiterated that the broadcaster should find more strategic interventions to deal with the financial situation, including proposals for new funding models.

The SABC receives 85% of its revenue from advertising, sponsorships and other commercial partnerships, 3% from the government and 12% from TV licence fees. It has mainly attributed its staggering losses over the years to declining advertising revenue across all platforms, coupled with deteriorating TV licence-fee collection.

The broadcaster sank into deeper crisis late in 2018 following the resignation of four directors, which left its board without the quorum required to make decisions.

Their resignations came in the wake of a scathing letter by communications minister Stella Ndabeni-Abrahams to the board in which she accused the nonexecutive directors of not acting in the best interest of the public broadcaster as they pressed on with retrenchments.

In 2018, executives said the SABC had uncovered a number of irregular promotions and salary increases by the previous management, which resulted in the inflation of the salary bill. The broadcaster was overstaffed yet the wage bill was further inflated when freelancers were hired to do jobs that should be done by permanent employees.

In September 2018, the SABC, which recorded a loss of R622m in the financial year to end-March, was granted borrowing powers and a borrowing limit of up to R1.2bn by the Treasury.

The broadcaster spends more than R3bn a year on the salaries of its 3,000 permanent employees. It expects a net loss of R805m in the 2018/19 financial year, should cost-cutting measures fail to be implemented.

phakathib@businesslive.co.za