Years of fat make SABC suffer now, as 400 employees face the chop

The SABC says it has no option but to retrench 400 of its almost 3,000 employees for its own survival.

Years of extravagant bonuses and salary increases, along with a bloated staff complement, have brought the public broadcaster to this point, says group CEO Madoda Mxakwe.

"It's a difficult process to go through, but the alternative is really literally the collapse of this institution," he told the Sunday Times on Friday.

Mxakwe said the SABC had done everything possible to cut costs and save jobs but was left with no choice but to reduce its vast salary bill.

Apart from the lay-offs, the SABC will freeze salary increases for the next three years, reduce leave entitlement from 35 days to 28, cut sick leave from 30 days a year to 36 days over three years, and discontinue the encashment of leave days, which Mxakwe described as a costs "monster".

The SABC's salary bill represents more than half its revenue and 45% of its expenditure.

"It's just not sustainable. We are sitting with an issue where the cost-to-income [ratio] exceeds 100% and you can't run an organisation like that," he said.

"If you look at some of our competitors, they are really mean and lean."

Mxakwe said that wages as a percentage of expenditure stood at about 15% for MultiChoice, 11% for e.tv's eMedia and 29% for the BBC.

"If we were at anything between 30% and 35% for a start, it would help," he said.

The SABC announced this week it would retrench 400 staff, not 600 as forecast earlier this year. Its turnaround strategy, which included job cuts, was approved by the government in September last year and the SABC received a R3.2bn bailout shortly afterwards.

Retrenchments were part of a plan drafted within the Treasury at the request of communications minister Stella Ndabeni-Abrahams.

But on Wednesday, parliament published a written reply from Ndabeni-Abrahams to an EFF question in which she said her ministry does not support the retrenchments, because the SABC had not followed the turnaround plan drafted in the Treasury.

But Mxakwe insists that SABC management is adhering to the strategy and the preconditions for the bailout. "We could just not shy away from dealing with the biggest cost driver, which is the salary bill," he said.