Over the past few months, a growing number of companies across multiple industries have announced plans to cut thousands of jobs in South Africa, delivering yet another blow to an economy already grappling with high unemployment and sluggish growth.
This ongoing wave of retrenchments threatens to further stall the country’s economic recovery, as businesses struggle to stay afloat in a low-growth environment.
Chief Economist at Econometrix, Dr. Azar Jammine, stated the trend reflects deeper structural weaknesses in the economy.
“The significance is that it is not coming as a surprise. If an economy keeps growing by less than 1% per annum over an extended period and the population is growing by 1.5% per year, it suggests that people are becoming poorer over time. The level of business activity is just insufficient to ensure the viability of many companies. Large corporations can retrench workers to stay alive, but for small businesses, retrenchment often means shutting down completely.”
COSATU spokesperson Zanele Sabela stressed that the federation is deeply concerned about the rise in job losses.
“We are extremely concerned, considering that our unemployment rate is already so high. To have companies retrenching and adding more people to the unemployment queue is a serious concern.”
Economists warn that without sustained economic growth and structural reform, South Africa’s unemployment crisis, already among the highest in the world, could worsen in the coming months.
Listen to the full interviews with Dr. Azar Jammine and Zanele Sabela below:
VOC News
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