Unemployment in South Africa rose to 30.1% in the first quarter of 2020, according to Stats SA.
Since the beginning of the year, SA’s tech sector has seen a jobs bloodbath.
- In January, telecommunications giant Telkom communicated it was retrenching as many as 3 000 employees
- Retail giant Massmart closed down its electronics units – DionWired and Masscash – leaving 1 400 people without jobs
- Systems integrator Dimension Data revealed that approximately 480 employees were to leave the business through a Section 189 process
- Cell C announced it was to let go of as much as 40% of its semi-skilled labour force, as well as some senior managers and executives
- SABC is also set to cut about 600 jobs
During the period, finance shed the most jobs (50 000), followed by community and social services (33 000), agriculture (21 000), transport (17 000), manufacturing (15 000), construction (7 000) and utilities (4 000).
South Africa’s unemployment rate for the first quarter of this year rose by a percentage point to 30.1%.
The number of employed persons decreased by 38,000 to 16,4 million between January and March 2020, while the number of unemployed persons increased by 344,000 to 7,1 million compared to the fourth quarter of 2019.
South Africa’s unemployment rate increase by 1,0 percentage point to 30,1% in Q1:2020 compared to Q4:2019. The unemployment rate usually increases between Q4 and Q1 each year.
Chief economist at Stanlib, Kevin Lings, said that these numbers were exceptional.
“The unemployment rate from my perspective jumped quite substantially, it’s now at about 30%. What’s stood out in particular, is that in the past year, almost 900,000 more people have become unemployed and I think that is exceptional and it speaks to our inability to create jobs in a very low-growth environment.”
It’s important to note that these figures capture data from the first quarter of this year.
National Treasury now estimates that job losses could be between 690 000 and 1.79-million due to the impact of the Covid-19 pandemic on the South African economy.
The 690 000 job losses are likely in the event of a quick recovery; the larger figure is a worst-case scenario.
The sectors that will see the largest impact are likely to be:
- Catering and accommodation; and
- Financial and business services.
Avis Budget Rent-a-Car, part of the Barloworld Group, announced that a total of 978 employees would be affected by retrenchment, according to a Fin24 article. This is nearly half of the employees of the company.
Meanwhile, the Bidvest Group’s shares fell more than 5% on Monday after the diversified services and trading company warned of possible job losses as a result of coronavirus-related disruptions across its operations.
This is in addition to running list of companies in South Africa who have gone into business rescue, or foresee retrenchments and job cuts.
- Phumelela Gaming and Leisure (currently in business rescue)
- Afarak Mogale and Afarak South Africa (currently in business rescue)
- SAA (currently in business rescue)
- SA Express (currently in business rescue)
- Edcon (currently in business rescue)
- Comair (currently in business rescue)
- Tiger Brands
- Cell C
- Pam Golding
- Flight Centre
By Lungile Satsuma for IOL
Omphile Mabitsela, 7, is so determined to beat the country’s harrowing unemployment statistics that he has already started building his stationery empire.
Mabitsela, a Grade 2 learner from Randburg, has already roped in two of his friends, his aunt and mother to help him grow his stationery business.
His “office” space is situated at his mother’s business building, also in Randburg. Quirk Quirk Inc, Omphile’s business, produces and supplies a variety of paper-based stationery, such as bookmarks and party packs and sells puzzles, crayons and pencil cases.
He told The Star this week he wanted to be the person who hired the unemployed who he heard President Cyril Ramaphosa speaking about in the media. It was announced recently the country’s unemployment rate had shot up to 29.1%.
“President Ramaphosa told us there are so many people who are not hired so I want to be that person who hires them,” Omphile said.
His mother, Prudence Mabitsela, said parents needed to instill entrepreneurial skills into their children to become self-starters and not necessarily wait for jobs.
“We should stop creating job seekers as a country and start creating jobs ourselves,” she said.
The young mogul said he was inspired by his mother to start his business which has been in existence for a year now. It also has its own website.
“It was my mother that inspired me to start my business because she is a business owner as well. I want to hire people who don’t have jobs,” he said.
Quirk Quirk Inc is a registered and 100% black-owned business. Omphile mixes his academics and arts to produce his products.
He said his passion was inspired by his friend who showed him his “quacks quacks” and that inspired him to make bookmarks for people who read books. These sold for R10 each.
His mother said Omphile was someone who was aware of his surroundings and wanted to assist where he could.
“He has hired a team which consists of social strategists, a brand manager and a receptionist,” she said.
Omphile said his target audience is from everywhere in South Africa and people can order items online.
His parents initially funded the company which eventually grew to be self-sustainable.
The determined young man said he was motivated by unemployed people seeking jobs and knowing that he can be the solution in inspiring people to be business-minded.
“I want to inspire them to have their own company,” he said.
The company has sold more than 1000 products countrywide.
South Africa’s unemployment rate is getting worse. The latest stats from Stats SA, as well as the opinions of leading economic and labour experts, paint a very dire picture:
- The unemployment rate increased by 1,4 percentage points from 27,6% in the first quarter of 2019 to 29,0% in the second quarter of 2019
- The number of people unemployed grew by 455 000
- The number of people employed grew by just 21 000
- Government’s failed Industrial Policy Action Plan (IPAP) was supposed to create 350 000 manufacturing jobs
- 320 000 manufacturing jobs have been lost since 2008
- Gang violence on the Cape Flats is a direct result of the loss of jobs in the textile industry in the areas
- 6,7-million people are currently unemployed in South Africa – the size of the entire country of Bulgaria
By Jewel Stolarchuk for The Independent
18 000 jobs in Deutsche Bank are set to be cut as the German national lender embarks on mass retrenchment exercise. Whole teams at the bank’s Asia-Pacific offices have reportedly been let go, as the lender seeks to transform itself from an investment bank that used to compete with the lenders in Wall Street, after struggling in the aftermath of the financial crisis.
Deutsche Bank employs about 4,700 employees in its Asia-Pacific offices in Singapore, Sydney, Tokyo and Hong Kong. The investment banking team in the region consists about 300 staff members and it is expected that 10 to 15 per cent of these employees and almost all the employees in the equity capital markets division will be retrenched.
According to Reuters, the restructuring plan will ultimately cost 7.4 billion euros (SGD $11.31 billion) and will see the bank cut back on its fixed income operations and axe its global equities business altogether.
Most of those retrenched are working in the bank’s offices in Europe and the United States but some offices from Sydney to Hong Kong were also affected. Retrenched workers are due to sign redundancy packages.
One Deutsche bank employee, an equities trader based in the Hong Kong office who declined to be named, told Reuters that staff were called individually to meetings and that the mood was “pretty gloomy” as the job cuts began. He said: “(There are a) couple of rounds of chats with HR and then they give you this packet and you are out of the building.”
While a Deutsche Bank spokeswoman declined to comment on specific departures, an insider who is familiar with the bank’s Australian operations told Reuters that most of the mergers and acquisitions staff would not be immediately affected but the teams in the four-strong equity capital markets were being retrenched.
The Deutsche bank spokeswoman assured the press that the bank would be directly in touch with employees. She added: “We understand these changes affect people’s lives profoundly and we will do whatever we can to be as responsible and sensitive as possible implementing these changes.”
Deutsche Bank’s Chief Executive Officer Christian Sewing called the retrenchment exercise part of a “restart.” In a letter to employees, he wrote: “We are creating a bank that will be more profitable, leaner, more innovative and more resilient.”
This “restart” comes on the heels of Deutsche Bank’s failure to merge with its rival Commerzbank. In May, Mr Sewing hinted at extensive restructuring as he promised shareholders that he will implement “tough cutbacks” to the investment bank.
How it will impact South Africa
According to an article by Business Insider, the Sandton headquarters employ approximately 70 staff.
- The equity trading desk will be closed completely, with the loss of around 12 jobs
- The fixed income team, which trade bonds, will remain largely unchanged in South Africa
The bank suffered a pre-tax loss of €16-million (R251,5-million) on its South African activities last year, according to the Deutsche Bank annual report.
By Luyolo Mkentane for Business Day
The unemployment rate rose to a near 15-year high in the first quarter of 2019, highlighting the enormity of President Cyril Ramaphosa’s plans to recover the country’s economy.
Ramaphosa said he wants to lead the country out of “nine wasted years”, a tacit reference to his predecessor Jacob Zuma’s term in office, which was marked by increasingly brazen corruption and state capture. Under Zuma’s watch unemployment soared and economic growth faltered, while confidence in the SA economy fell to new lows.
Read the full article here: https://www.businesslive.co.za/bd/economy/2019-05-14-soaring-joblessness-weighs-on-ramaphosa-presidency/
By Tehillah Niselow for Fin24
The official unemployment rate increased by 0.5% to 27.2% in the second quarter of 2018, up from 26.7% in the first three months of the year.
Statistician-General Risenga Maluleke released the Quarterly Labour Force Survey for April, May and June in Pretoria on Tuesday.
The increase in the unemployment rate was due to a decline of 90 000 people in employment, as well as an increase of 102 000 people who became unemployed. Additionally, the number of discouraged job seekers rose to 2.9 million people, between the first and second quarters of 2018.
Manufacturing has lost 55 000 jobs year-on-year, and Maluleke said that basic metals and food production were the main drivers of the employment losses in the sector.
The industry hardest hit by job losses was manufacturing, with 105 000 people becoming unemployed in that sector in the second quarter. Community, social and services recorded a 93 000 jobs contraction, and 57 000 employment positions were cut in trade.
The transport sector accounted for the largest increase in jobs, with 54 000 new positions in the second quarter, while mining added 38 000, private households 22 000 and utilities increased by 18 000.
Of the 20.2 million South Africans aged 15 to 34 years, the number of young people not in employment, education and training (NEET) increased by 0.4% in the second quarter year-on-year.
This rate increased for black African males and white males. The female rates of NEET was recorded at over 40% among black African females aged 15 to 34 years old.
“Black women are the most vulnerable when it comes to unemployment,” Maluleke said.
The unemployment rate declined to 26.7% in the fourth quarter of 2017, according to the quarterly labour force survey released by Statistics South Africa (Stats SA) on Tuesday.
This comprises 5.9 million people, based on the official definition of unemployment which includes those who are not employed but actively looking for jobs.
However, this is 12.7 percentage points away from the 14% targeted in the National Development Plan for 2020, according to statistician general Risenga Maluleke, who delivered the results in Pretoria. The NDP target for 2030 is 6%.
This is 1 percentage point down from the unemployment rate of 27.7% recorded for the second and third quarters of 2017.
Based on the expanded definition of unemployment – those aged between 15 and 64, who are not employed and are available for work – a total of 9.2 million people were unemployed, amounting to 36.3%.
There was a net decrease of 21 000 to 16.2 million in the number of those employed. Unemployment decreased by 330 000.
The absorption rate – which measures the proportion of the working age (15-64) population currently employed – was 43.1%; the 2030 target is 61%. The labour force participation rate, which measures the working age population actively engaged in labour by being employed or available to work, was 58.8%; the 2030 target is 65%.
Formal sector employment for the quarter declined by 135 000, and informal sector employment increased by 119 000 compared to the previous quarter.
The unemployment rate of women (29%) remains higher than that of men (24.8%). Women are also less likely to participate in the labour market, according to the report. Black women remain the most vulnerable, with an unemployment rate over 30%.
Stats SA also showed that unemployment is higher for those with lower education levels. The unemployment rate for those with less than matric is 31.2%, compared to graduates which is at 6.6%.
“You see education playing a critical role in labour markets,” said Maluleke.
Of the 10.3 million people in the age category between 15 and 24 years of age, 29.7% were not in employment, education or training. “Young people aged 15-24 remain vulnerable in the labour market with the unemployment rate of over 52% and absorption rate of almost 13%,” according to the report.
The unemployment rate of those aged between 25 and 34 (33.4%) is double that of 45- to 54-year-olds (15.6%).
“The absorption rate for people aged 25-34 years old is over 13 percentage points lower than that of people aged 45-54 years old,” the report read.
Drop in finance industry
Services, trade and finance remain the main contributors to employment and GDP for the quarter.
However, employment in the finance industry decreased by 91 000 for the quarter. There were also declines in the mining industry (35 000), trade (45 000) and private households (43 000).
There were gains in the social services industry (75 000), manufacturing (42 000), agriculture (39 000) and construction (26 000).
By Lameez Omarjee for Fin24
Fewer than a quarter of matrics find jobs relatively quickly, according to economist Mike Schüssler of economists.co.za.
Those members of the matric class of 2017 who will not be studying further, but will be looking for a job, will not be easily absorbed by the job market, he told Fin24 on Tuesday.
“It will be tough for them to get work. Over 50% of our matriculants under the age of 34 have not found permanent employment and it’s not getting better,” he said.
“This is part of the process young job seekers go though. It takes long to get a first job – even for those with a degree it takes a while. You do not get a degree and suddenly you are running the firm.”
The overall unemployment rate in SA nears 28% in the narrow sense (excluding people out of work, but still actively searching) and 37% in broader terms (including those who have given up looking for a job). For young people this figure is much higher. Schüssler estimates it to be well over 50%.
“To get your first job is probably one of the hardest things in life and often takes a while. If you have not had a job, you are regarded as not having ‘proven’ yourself yet,” explained Schüssler.
“Unemployment in SA is high already, but for the youth it is higher and for those looking for a first job it is very tough.”
According to Statistics SA, only 12.8% of people in SA between 15 and 24 have a job (in terms of the narrow definition). For those between 25 and 34 years of age, only 49.6% actually have a job; and for those between 35 to 44 years of age, 63% have a job.
“My message to matrics is that a job is a job. The big thing is to start off doing a first job. Yes, we will have minimum wages, but maybe we have to be careful regarding how it is implemented,” suggested Schüssler.
“Maybe people getting a job for the first time could be excused from having to get the minimum wage for the first two years of employment.”
Another suggestion by Schüssler is for young matriculants who do not find a job quickly to try and do volunteer work.
“Maybe ask if you can just get money for transport. At least you will still be in the process of learning. The next employer wants to know that you can stick to a job and perform the tasks you are given. That is very important,” said Schüssler.
Never lose hope
“Don’t give up hope. Everybody is suffering and employers often prefer young people who are a little bit older – about 25 years – as they might be regarded as being more mature and used to the discipline of sticking to a job.”
He pointed out that this is a global trend as older people tend to be regarded as having proven themselves – whether they have done so or not.
“Young people must try to offer a service – even start waitering, just start somewhere. The best advice is not to give up. And if you get a job, work hard. Employers want people who are productive and efficient,” said Schüssler.
“Young people must say to themselves: get a job, then negotiate and work your way up. It is not an automatic thing. Yes, SA’s unemployment is high, but all over the world young people struggle to find jobs.”
By Carin Smith for Fin24