Faced with a whopping R61 million cut in government funding and shortfalls of another R60m, the Eastern Cape Development Corporation (ECDC) is to embark on a belt-tightening exercise that will cut staff and change conditions of employment.

This comes after a human resource audit highlighted the need for change to overcome identified shortcomings and provide the means of achieving effective service delivery while ensuring that the ECDC uses its resources to best effect.

A 13-page notice released yesterday emphasises that the 60-day process will be fully consultative, allowing all employees equal opportunity to take part. Measures to avoid or minimise potential dismissals will be prioritised.

In an accompanying statement, ECDC chief executive Kevin Wakeford said the process had government approval and would be conducted under the auspices of the CCMA in terms of the Labour Relations Act.

Dealing with staff, the report states that in respect of personnel the HR audit showed that 50 percent of existing ECDC posts are occupied by middle and top management, whereas in business the norm is 20 percent.

Forty-one percent of the corporation's revenue is allocated to salaries and wages. The norm in the private sector is 30 percent.

Regarding the filling of posts and selection criteria, the process will endeavour to prioritise organisational efficiencies, ensuring effective use of existing resources, and where possible, the retention of jobs by exploring all reasonable alternatives to retrenchments.

Voluntary severance packages will only be considered in respect of non-essential staff.