South Africa is facing a severe industrial and economic crisis as 2025 draws to a close, with soaring electricity tariffs and failing infrastructure driving a wave of mass retrenchments. Major industrial players, including mining giants Glencore and Samancor Chrome, have announced the closure of operations, citing unsustainable energy costs. Simultaneously, a string of global corporations, such as Shell and HSBC, are exiting the country, leaving hundreds of thousands of jobs at risk in what trade unions are describing as a bloodbath before Christmas.

Power Costs Cripple Heavy Industry

The primary driver of the current unemployment surge is the escalating cost of electricity, which has rendered local smelting and manufacturing operations uncompetitive globally. According to recent reports, electricity tariffs for smelters have increased by roughly 900% since 2007, while inflation over the same period rose by only 103%.

Glencore’s ferrochrome venture in South Africa has announced it will idle its Boshoek and Wonderkop smelters, issuing retrenchment notices to staff effective from December 1, 2025. The company stated that the operations were suffering from unsustainable electricity tariffs and that, barring a government intervention, the cuts would become binding by December 9. The venture employs nearly 3,000 people, and trade union Solidarity estimates that approximately 2,400 employees will be affected by these closures.

Similarly, Samancor Chrome has warned it may cut as many as 2,496 jobs as it considers closing or downsizing operations including Ferrometals and Middelburg Ferrochrome. The company informed labour groups that high energy costs have made it impossible for the ferrochrome industry to survive. This is a significant blow to the economy, as South Africa was once the world’s largest producer of ferrochrome before losing its leading position to China in 2012 due to unreliable power supply.

The Ripple Effect on Manufacturing

The crisis extends beyond the mining sector. ArcelorMittal South Africa (AMSA) is winding down its Longs Steel operation, a move that will directly impact over 3,500 jobs. However, the Department of Employment and Labour has warned that this closure could lead to a catastrophic loss of over 100,000 jobs in downstream industries. Attempts to save these jobs through Unemployment Insurance Fund (UIF) relief collapsed after the company could not guarantee a halt to retrenchments.

The automotive sector is also shedding jobs. Ford Motor Company South Africa plans to cut 474 jobs across its Silverton and Struandale plants, while Goodyear South Africa is closing its Kariega manufacturing plant, placing roughly 900 jobs at risk. Coca-Cola Beverages South Africa has also announced restructuring plans that will cut approximately 680 jobs. In total, the automotive industry has seen more than 4,000 job losses over the past two years.

Eskom and the Infrastructure Collapse

At the heart of the industrial collapse is the deterioration of the state-owned power utility, Eskom. Once the world’s lowest-cost producer of electricity, Eskom has transformed into a financial burden for the country. Data reveals that Eskom sold less electricity in 2022 than it did in 2008, yet its staff costs have tripled from R11 billion to R33 billion in that same period. The utility’s energy availability factor has plummeted from 85% to 62%.

Energy experts warn that the closure of smelters creates a vicious cycle for Eskom. Smelters are among Eskom’s most reliable paying customers, and losing them further weakens the utility’s revenue stream, potentially necessitating even higher tariffs for remaining consumers. The collapse of Transnet’s railway system has further aggravated the situation, making it difficult for heavy industries to operate logically and profitably.

Global Giants Exit the Market

Compounding the unemployment crisis is the departure of major multinational corporations. In late 2024 and throughout 2025, several global firms announced their exit from South Africa. HSBC is exiting after three decades, transferring its banking assets to FirstRand and Absa. BNP Paribas has also closed its corporate and investment bank in the country.

In the energy and retail sectors, Shell announced its intention to exit its shareholdings in South African retail, transport, and refining operations, citing a review of non-core assets. TotalEnergies has abandoned its offshore oil and gas projects, deeming them economically unviable due to the small local market size. Even luxury brand Rolex announced the closure of its Sandton office after 76 years, pointing to changing local market conditions.

Calls for Urgent Intervention

The scale of the crisis has prompted urgent calls for government action. Trade union Solidarity has declared a formal dispute with the government, warning of a social crisis if the state does not intervene in the electricity tariff structure. The union noted that between 300,000 and 400,000 jobs have already been lost in the heavy industry sector.

Parliament’s Select Committee on Economic Development and Trade has expressed grave concern, with Chairperson Sonja Boshoff warning that the damage to the industrial base could be irreversible without coordinated action. She has urged the government to convene an emergency summit with labour and industry leaders to stabilize the power supply and restore investor confidence.

Despite these calls, the Department of Employment and Labour admits that while it has intervened in some entities like the South African Post Office, current measures are insufficient to stem the bleeding of jobs across the wider economy. With over 250,000 jobs currently at risk across mining, steel, and manufacturing, South Africa faces a precarious economic future heading into 2026.