The Department of Employment and Labour has issued a strong warning regarding the growing number of retrenchment notices being issued at major corporations in South Africa. Officials have cautioned that the current wave of potential job cuts could eventually affect more than 250,000 individuals across the country, creating widespread economic and social hardship if it continues unchecked.
Key Takeaways
- Massive Job Losses Across Industries: Over 250,000 jobs in South Africa are currently at risk, with retrenchments reported in steel, automotive, and mining sectors, creating a severe threat to the economy and livelihoods.
- Failed Interventions at ArcelorMittal: Despite R417 million in funding being secured through the UIF’s TERS programme, the deal collapsed as the company could not guarantee a halt to retrenchments, leaving thousands of workers vulnerable.
- Glencore Retrenchments Could Hit Communities Hard: The potential closure of additional furnaces at Glencore threatens 2,425 direct jobs, 17,000 indirect jobs, and the wellbeing of an estimated 155,000 dependents, placing entire mining towns at risk of collapse.
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Minister Expresses Concern Over Job Losses
The Minister of Employment and Labour, Nomakhosazana Meth, expressed deep concern about the retrenchments currently under way at Ford South Africa, ArcelorMittal South Africa (AMSA), and Goodyear SA. The minister emphasised that the scale of these retrenchments is extremely troubling, given the importance of these companies within the South African economy and the far-reaching consequences for workers and their families. She highlighted that these industries are traditionally regarded as anchors of employment in South Africa, meaning their decline could have devastating ripple effects across entire communities.
At ArcelorMittal South Africa, the planned winding down of the Longs Steel operation by the end of the current month is expected to result in more than 3,500 direct job losses. However, the department has warned that the consequences will not be confined to direct employees, as the shutdown could lead to more than 100,000 additional job losses in downstream industries that rely heavily on AMSA’s operations for their survival. Analysts have suggested that these downstream industries include small manufacturers, logistics firms, and service providers, all of whom depend heavily on the stability of steel production.
Government and Stakeholder Interventions
The department has confirmed that it has been working closely with other critical stakeholders, including the Department of Trade, Industry and Competition (DTIC) and the Industrial Development Corporation (IDC), in an attempt to intervene and limit the scale of retrenchments at the steel producer. These efforts have been described as ongoing and collaborative, aimed at exploring every possible avenue to preserve jobs in the steel industry. However, progress has been slow, with some industry experts criticising the government for reacting too late to a crisis that has been building for years.
Funding Support and Conditional Agreements
In May 2025, the department managed to secure significant financial support for AMSA workers in the form of R417 million through the Unemployment Insurance Fund (UIF) under the Temporary Employer/Employee Relief Scheme (TERS). This funding was earmarked to provide assistance to 2,982 employees directly affected by the restructuring. Despite this commitment, the department explained that the agreement could not proceed as the company was unable to provide the required assurance that retrenchments would be halted.
For many workers, this raised hopes of temporary relief, only for those hopes to be dashed when conditions were not met.
Collapse of Funding Agreement
Because ArcelorMittal South Africa could not provide guarantees against job cuts, the UIF funding arrangement collapsed. The department described this outcome as extremely unfortunate, stressing that while it had worked to secure the deal, the inability of the company to meet the conditions rendered the funding unavailable. Despite this setback, the department stated that it remains committed to pursuing other intervention strategies to address the crisis within the steel sector.
Union leaders have condemned the failure of the agreement, arguing that thousands of families are now left without any safety net or clarity about their future.
Retrenchments in the Automotive Sector
The crisis is not confined to steel, as job losses are also mounting within the automotive industry. Ford Motor Company South Africa recently confirmed plans to cut 474 jobs across two of its manufacturing plants. This announcement came shortly after Goodyear SA revealed that 900 jobs would be lost within its own operations. According to the department, these are only two examples among many, with a broader pattern of retrenchments being announced in both the vehicle and mining industries over recent months. The contraction of the automotive sector is especially concerning because it has historically been one of South Africa’s biggest exporters and a major contributor to GDP.
Mining Sector Blow as Glencore Retrenchments Loom
Outside of the department’s immediate statements, further retrenchments are also emerging from the mining industry, most notably at Glencore. Trade union Solidarity confirmed that it has received retrenchment notices from the company, which could affect more than 155,000 people when both direct and indirect impacts are considered. The potential scale of the losses has been described as disastrous, particularly for mining communities dependent on the company’s continued operations.
Entire mining towns could face economic collapse if the company proceeds, with schools, clinics, and local businesses all likely to suffer.
Structural Challenges in the Mining Industry
Glencore has explained that the proposed retrenchments are the result of the ongoing non-viability of its smelting operations. The company highlighted several structural challenges, including rising electricity tariffs imposed by Eskom, inefficiencies in the utility’s pricing structure, the collapse of Transnet’s railway system, and the failure of government to create competitive industrial conditions within a reasonable time frame. These factors have combined to create what the company described as an untenable operating environment. Observers have noted that these structural issues are not unique to Glencore but are representative of systemic problems across the South African industrial economy.
Glencore has already been severely affected, with 10 of its 22 furnaces either permanently or temporarily closed due to the unsustainable conditions. Solidarity has warned that if the remaining furnaces are forced to close as well, the impact on employment will be devastating. The union estimates that 2,425 direct jobs are at immediate risk, with more than 17,000 indirect jobs also vulnerable, while an estimated 155,000 dependents could lose their livelihoods if the company is unable to sustain operations.
This would represent one of the largest waves of retrenchments in South Africa’s post-apartheid history, placing unprecedented pressure on already strained social support systems.
A Positive Intervention at the South African Post Office
Amid the widespread job losses, the Department of Employment and Labour pointed to one area where its interventions have been successful. At the South African Post Office (SAPO), the department managed to secure R381 million through the UIF programme. This funding provided immediate relief to 5,956 employees while also enabling SAPO to implement a sustainable turnaround plan over a six-month period. The department reported that the intervention has allowed the Post Office to stabilise operations and progress towards financial recovery. SAPO’s turnaround is being highlighted as a rare example of state intervention delivering tangible results in a struggling institution.
Department Acknowledges Limited Success
The department expressed satisfaction with the SAPO intervention, describing it as a decisive step towards saving jobs and securing the company’s future. However, Minister Meth acknowledged that such successes, while important, are insufficient in the face of the broader employment crisis currently unfolding across multiple industries. She cautioned that without larger-scale solutions, these isolated victories would do little to stem the tide of job losses sweeping the nation.
Human Cost of Retrenchments
The minister emphasised that the numbers being reported are not just abstract statistics but represent people with families, dependents, and responsibilities such as school fees, housing costs, and daily living expenses. She stressed that the ripple effects of mass retrenchments extend far beyond the individuals directly employed, impacting entire communities.
Social workers have warned that mass job losses could also lead to rising levels of poverty, food insecurity, and crime if urgent measures are not implemented.
Commitment to Support and Job Preservation
Minister Meth concluded by stating that the department would continue to act within its mandate to provide support to struggling businesses and affected workers. She reaffirmed the government’s commitment to reducing unemployment by maintaining intervention strategies, supporting companies where possible, and working with all relevant stakeholders to mitigate the ongoing jobs crisis in South Africa. She insisted that, despite the challenges, the state cannot afford to stand idle while hundreds of thousands of livelihoods hang in the balance.
Conclusion
The unfolding retrenchment crisis in South Africa highlights deep structural weaknesses in key industries and the growing struggle of government departments to safeguard jobs. While the Department of Employment and Labour has achieved limited successes, such as securing temporary relief at the South African Post Office, these measures remain insufficient against the scale of the crisis. With rising costs, infrastructural failures, and global pressures weighing heavily on businesses, South Africa faces the possibility of a jobs catastrophe that could further strain social systems, deepen poverty, and destabilise communities unless urgent and coordinated action is taken.
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