Eskom mulls cutting management units to trim costs

Eskom is considering reducing its executive committee and having fewer divisions, thinning out top management as the South African state-owned power utility aims to cut costs.

The electricity provider earlier this month said executives were being consulted over job cuts as it struggles with high debt levels and declining demand.

One proposal would see the 10-member executive committee reduced to six, being operations, finance and services, human resources, legal and compliance, information technology, and procurement, according to a document seen by Bloomberg. These would report directly to the chief executive officer, it showed. IT and procurement offices would no longer be at the most senior executive level known as F Band, it indicated.

“We are not in a position to make any public pronouncements on our strategic review document until it has been shared with our principals and key stakeholders,” spokesman Khulu Phasiwe said.

Reporting to operations would be seven units including distribution and transmission, which are currently at the higher level. New divisions would be group technology and Africa strategy, the document showed.

Eskom is also considering a new operating model, according to a separate document. While the initial focus of the project would be to move the power company toward long-term sustainability, it’s eventually aiming to become a “pan-African” utility, that document said.

The utility’s payroll, which has grown by more than a third in a decade, has come under scrutiny as executives and government officials consider options to revive the struggling company. Eskom has been identified as a key risk to South Africa’s economy by ratings companies.

-Bloomberg