Johannesburg - The first formal shots were fired with Lonmin's announcement to unions last week that it planned to retrench thousands of workers at Marikana, but a fresh wave of labour cuts has already begun to ripple through the economy.
Lonmin's announcement is the first visible sign of large-scale labour cut-backs, but in Statistics South Africa's quarterly labour force survey it was evident that the mining industry had shrunk by 32 000 jobs in the third quarter.
In the 1990s South Africa became accustomed to large-scale job cuts - if one can actually become accustomed to that. These began in 1996 when more than 60 000 workers in gold mines received less than two weeks' notice of dismissal.
But, since 2004, when the provisional liquidation of two gold mines - Buffelsfontein and Hartbeesfontein near to Klerksdorp, was averted - large-scale job losses became an anomaly.
In the next 18 months to two years they will again become fairly common as a direct consequence of the global economic crisis.
Research compiled by Paul Joubert of the Solidarity trade union's research institution sums it up well. "The global economy is moving in more or less the following cycle: developing countries are producing for China and, in turn, China is producing for the US and Europe.
"If demand in the US and the EU declines Chinese demand for the resources of the developing world, especially metals, will consequently fall.
"The weaker rand can to some extent hedge South Africans exporters, but not entirely. Figures from January to August show that South Africa's manufacturing sector grew by only 0.4%, whereas economists expected 3% in the wake of the rand's depreciation," says Joubert.
Like many other analysts, he reckons that South Africa will escape the worst - such as the collapse of financial services. Corporate credit for companies will however still be extremely difficult to come by, making company growth more difficult. This has already put consumer spending under pressure.
Besides the mining sector, which is affected first because of the decline in the prices of metals and coal, the motor industry in South Africa will be hurt. Vehicle sales in the country have been declining for 17 months.
In the medium term this will inevitably affect services such as repairs, motor vehicle insurance and component manufacture, all of which grew into a massive South African industry after 1994.
Anglo Platinum may also cut jobs
Various companies in the steel industry have already informally told unions that job cuts are being considered.
The collapse of the global motor industry is the biggest reason for the decline in the platinum price. An interesting issue that arises regarding platinum mines concerns their contingent obligations in terms of the mining charter related to job cuts.
The new mining legislation demands that mining companies present a social and labour plan before their mining licences can be converted to new-order licences. The plan has to provide for comprehensive retraining of miners affected by labour cuts.
Lonmin, in fact, was the first major platinum company to have its mining licences converted.
It is rumoured that Anglo Platinum, which acquired new-order mining rights earlier this year, is also planning retrenchments.
The building industry is also feeling the impact of the credit crisis, especially in the residential sector. Developers could previously get credit once 60% of the contracts of sale for a new development had been signed, but banks have now pushed this figure up to 80%.
Construction of low-cost housing has declined by 70%.
In the banking sector itself belts are being tightened. Absa is planning to shed 1 210 jobs, Standard Bank has frozen posts, and Nedbank intends reducing its staff by 80.
Construction on 2010 programmes, as well as Eskom and Transnet infrastructure projects, compensates slightly for these declines.
The clothing and textile industry has shed 5 000 jobs this year, with 20 companies closing down.
There is some good news, however, although at this stage it's somewhat tenuous. Altech's court victory against the Independent Communication Authority (Icasa) obliges Icasa to furnish telecommunication service suppliers with licences should they want to build their own networks. This opens the door for large-scale expansion in telecommunications.
More pain and job losses lie ahead, but at this point most analysts believe the situation will be short-lived. How short? Joubert says anything from 18 months to four years.
- Sake24