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FIFI PETERS: Let’s click into the technology sector right now, reflecting that globally we have seen the sector haemorrhaging jobs – the likes of Amazon, Meta (which owns Facebook), Instagram, Alphabet (the parent company of Google), Microsoft, Spotify (the streaming service), Intel and IBM – and the list goes on, all announcing major job cuts this year, some running into the tens of thousands. A lot of these companies actually have operations here in South Africa.
So here to talk about what the hiring trends and the employment picture are looking like in South Africa’s technology sector, I’m joined by SA’s Statistician-General, Risenga Maluleke.
Sir, thanks so much for your time. We’ve seen some scary numbers globally being announced from the tech sector in terms of jobs. A lot of these companies are telling us that they over-hired during the pandemic, and now they need to cut costs since most people have returned to work, negating the need for a lot of their software and entertainment technology.
Before I ask you what you have seen this year in terms of hiring trends in the technology sector, I’d like to ask you to help us take a step back and tell us what you saw in terms of hiring and the employment pattern in the local tech sector during the pandemic.
RISENGA MALULEKE: Well, let me start off by saying that in the official statistics area we don’t have ‘scary numbers’. Any number that we have to make available, we’ll make it because otherwise, if we start having taste buds, like this number is ‘good’, or ‘scary’, we’ll have a serious problem.
But let’s get straight to the issue. During levels of Covid-19, the highest levels of lockdown, we actually shed jobs. Remember, we were sitting at about 16.4 million people at the time who were employed, and we went down to 14.2 million. So during the highest level of lockdown in the second quarter of 2020, we went down by two million jobs lost.
FIFI PETERS: Would you be able to give us the specific colour of what happened in the ICT sector?
RISENGA MALULEKE: Certainly. What happens is that, one, let us look at areas like agriculture, where you don’t use much ICT. There was not much in terms of work that could be done. People either were off work or had to be there at work, in person, specifically in the ICT sector. It’s because these are areas where you could get what we call the ‘tools of trade’. In our telecommunications report that we produced prior to the pandemic, we can see that in terms of telecommunications alone we were sitting at about 64 194 jobs, to be specific. But over time when we go further, those numbers in 2020 were increasing because of the facilities that were needed in telecommunications.
FIFI PETERS: So you’re saying that the local ICT sector also possibly went on a hiring spree then, in the pandemic?
RISENGA MALULEKE: Certainly, yes.
FIFI PETERS: And now? What I wanted to say, since we came off the harshest and the strictest level of the lockdowns here in South Africa, is: have you seen a change?
RISENGA MALULEKE: One of the things is that telecommunications and storage are still bundled together. But one of the things is that we have seen them not only shedding jobs – I can’t say they shed jobs on a large scale – but we have seen fluctuations back to pre-pandemic levels.
FIFI PETERS: But when you read global headlines on these major job cuts in technology, by technology companies, many of whom operate here in South Africa, as a statistician how does that translate into a potential outcome for South Africa? Do you read that as being the potential start of the trend that could hit not only what’s happening outside South Africa, but also us – or do you not read as much into those headlines as I do?
RISENGA MALULEKE: We don’t because what our forecast is measuring is what is happening in the country. So we leave that to commentators like yourself, as well as to policy makers, whose place it is to make policies. But for ourselves, we actually focus on what is [happening] in the country, or within the country.
FIFI PETERS: All right. Sir, when is the next unemployment or employment report coming out?
RISENGA MALULEKE: We should be coming out [during] the month of February in terms of the Quarterly Labour Force Survey. You will remember that we have already come out [with] the issue of the second quarter of 2022, and the third quarter of 2022 [reports]. So we are headed to come out in February.
FIFI PETERS: So the bottom line is, in terms of employment patterns in the local technology sector, one cannot infer that just because these job cuts are being announced globally, we could see the same here in South Africa?
RISENGA MALULEKE: Not necessarily. Let us look at the one thing we have seen coming out [in] the first quarter of 2022 to the second quarter.
We have seen the transport and telecommunications industries losing jobs in general. But what we are seeing is that we are falling back to pre-pandemic levels.
The one other thing that we should appreciate as well is that, especially in a support [area] that is needed in the telecommunications and ICT environment, it is because our markets as Africa haven’t developed as much as we would see in other developed nations that would have actually hired a lot more people than we would have seen at our current levels in Africa – as well as in South Africa in particular.
FIFI PETERS: What about load shedding? I just had a conversation with a senior economist at Absa about the load-shedding impact on the manufacturing sector. You said that there was a declining [inclination] among manufacturing companies to hire in the month of January. Are you expecting, or have you seen in the recent while, any trends around load shedding and the impact that’s having on jobs?
RISENGA MALULEKE: Let me start by saying that I cannot talk about numbers that haven’t been made public.
So we cannot say we expect this, but what I can say is what we have seen – and I’m talking about the latest numbers – between quarter one and quarter two of 2022.
What we have seen is manufacturing had the highest loss of jobs, losing about 73 000 jobs. Of course, it was followed by transport and communications, in which telecommunications and ICT are included, having lost 54 000 jobs.
So indeed, when there is no electricity or power in the country in terms of load shedding, we do find a lot of sectors that are dependent on electricity for manufacturing, as well as those that are dependent on water because water depends on electricity to flow. In most manufacturing operations we do see them being impacted.
But as to what we would expect, I would say that once we bring out the quarterly labour force as well as the GDP numbers, we will be able to report better. I’m avoiding saying ‘we will see this’, because [if] it doesn’t appear like that I would shy away from making the numbers, and I would have lost my independence.
FIFI PETERS: Understood. Understood completely. But thanks so much for sharing the colour and the trends of what you have seen happen historically, because I think that helps you to keep your job. You’re talking about public numbers.
RISENGA MALULEKE: Certainly, by all means.
FIFI PETERS: All right, sir, thanks so much. We’ll leave it there for now. That was the Stats SA Statistician-General Risenga Maluleke. Really interesting insights, I think, to take away. There was a change in employment in the technology sector locally. There was a bit more hiring, although our local market is not as big and as sophisticated as we have seen globally. There also has been evidence of some job losses, but perhaps not to the significant levels that we are seeing elsewhere – just those employment levels in technology returning to pre-pandemic levels.
