Government replacing 30,000 employees in South Africa

The National Treasury’s Early Retirement programme is in full swing, with it being implemented from 15 October 2025 and estimated to impact 30,000 jobs within the government. 

This was revealed by Finance Minister Enoch Godongwana in his Medium-Term Budget Policy Statement, which was more positive than previous editions. 

The government is set to post a wider primary surplus, which will help it stabilise its debt load and begin paying down its liabilities over time. 

This is largely driven by increased tax revenue, with the government set to collect R19.7 billion more than initially expected. 

Increased revenue is coupled with the National Treasury’s policy of fiscal consolidation, which aims to keep a tight lid on spending. 

As part of this, the Treasury is aiming to make government spending more efficient. It cannot do this without tackling the public sector wage bill, which consumes a third of its total spending. 

One of the initiatives implemented by the Treasury in this regard is its Early Retirement Programme, which provides financial incentives for older employees to exit the public service. 

This programme has been officially implemented from October 2025 and aims to rejuvenate the public service with a younger workforce. 

Crucially, the early retirement of older employees will ease the government’s wage burden by replacing higher-wage employees with lower-wage entrants. 

The National Treasury has a tricky balancing act in trying to ensure that the government does not lose vital skills that are needed to ensure it can deliver services effectively. 

Up to 30,000 state employees are expected to opt for early retirement under this programme, resulting in savings of up to R7.1 billion per year. 

Last year, the National Treasury announced a plan to reduce the public sector wage bill through an early retirement incentive. 

Godongwana’s 2025 Budget provided R11 billion in funding to incentivise older public servants to retire early, resulting in the state’s workforce being younger and relatively cheaper.

Those wishing to pursue this option will have to apply, with approvals given only by the relevant executive authority, the Full Budget Review said. 

Up to 30,000 state employees are expected to opt for early retirement. The programme aims to manage staff headcount in a targeted manner and revitalise the public service.

The R11 billion will also be used to attract younger employees into the public sector workforce to ensure that when key staff are lost due to natural attrition, these posts can be filled. 

It is unclear how the incentive will work in practice. State workers aged between 55 and 60 are likely to be offered two weeks’ pay for every year they have worked, up to a maximum of 20 years and one week’s pay for every year they have been employed after that.

No penalties will be imposed on employees opting into the Early Retirement Programme.