Retrenchments, Al, cost of living behind SA's labour crisis

South African workers face a critical moment as the rise of artificial intelligence (AI) and the casualisation of the workforce threaten to exacerbate retrenchments and the national unemployment crisis.

- Lyse Comins

This was the warning from some of the country's major labour federations this week ahead of Workers’ Day, recognised locally and globally on 1 May.

At the same time employer organisations say businesses are being squeezed by the cost of meeting regulations, while the public scrutiny of their profit margins remains skewed.

These contrasting perspectives reveal deep fault lines in South Africa’s labour landscape where the official unemployment rate is 31.9%, according to Statistics South Africa’s latest data.

The burning issues in 2025 include Al, climate change and informal work, said Riefdah Ajam, the general secretary of the Federation of Unions of South Africa (Fedusa).

"We are championing workers’ rights in a changing world. We are looking at artificial intelligence and automation. We are looking at climate change ... and the ability of collective power to stand up to these changes so that no one is left behind," she said.

Ajam pointed to hospital group Mediclinic, which recently announced plans to automate administrative functions — a move expected to eliminate up to 1000 jobs.

"Mediclinic plans to slash jobs as part of an aggressive artificial intelligence and automation strategy aimed at saving nearly R2 billion by 2027, according to the strategy released at Remgro’s recent Capital Markets Day," she said.

Acquired by Remgro in May 2023, the group has placed a freeze on “nonessential new hires” and is offering severance packages as it turns to AT to “revolutionise operations”.

"Fedusa believes AI presents both challenges and opportunities for the labour force," Ajam said. "AI cannot completely replace human beings in the work environment."

But, left unchecked, she said AI and automation could extend beyond admin roles to professions such as nursing and teaching.