Mass retrenchments loom in SA telco sector
The South African telecoms sector faces a fresh wave of mass lay-offs as companies grapple with protracted strike action, lower financial returns, and increasing competition, among other things.
Business Report noted that MTN is set to start a new series of retrenchments, affecting ‘hundreds of jobs’ amid a strike by more than 2,000 employees that has dragged on for more than eight weeks.
Communication Workers Union (CWU) members at MTN have been striking since May 20, calling for a wage increase and bonuses.
The report cited unnamed sources close to the company, while MTN declined to comment because it is in a closed period.
On Monday (13 July), Telkom CEO Sipho Maseko said that the listed operator will freeze wage bills as it continues to engage with unions on its plans to reduce its staff content.
In its latest turnaround strategy, dubbed ‘Telkom 2.0′, the fixed line operator wants to cut 4,400 jobs through voluntary severance packages or voluntary early retirement packages.
Last week however, the Labour Court ordered Telkom to withdraw the Section 189 notices which were issued to organised labour, resulting in the process being halted altogether.
Maseko stressed that the company cannot continue the way it has. “There is still a fragility in our financial structure. There is still quite a lot working against us,” he said.
He noted that competition “is getting very fierce”, pointing particularly to a merger deal between Vodacom, and fixed line operator, Neotel.
The company has therefore implemented a number of cost cutting measures including:
- A wage freeze – the action of a company suspending salary increases for a period of time.
- More flexible working
- Implementing a shorter working week for certain staff
- Upskilling staff
- Outsourcing
Maseko said that as of Monday, the company would offer voluntary severance and early retirement packages for non unionised staff, which makes up between 40%-45% of the company’s staff.
Vodacom meanwhile, announced on Tuesday, that it is planning to outsource maintenance to cut costs, although it stressed that no jobs would be lost.
“Vodacom is investigating the possibility of consolidating existing outsourced maintenance contracts and potentially outsourcing some of our field maintenance activities,” spokesman Richard Boorman told Reuters.
“There would be no job losses if the envisaged changes go ahead,” Boorman said.
South Africa’s third largest mobile operator, Cell C notified its employees in May that it plans to embark on a restructuring process which could lead to job losses.
Cell C said in a statement: “Cell C confirms that it has commenced the process of consultation in respect of possible retrenchments.”
“At this time, and subject to consultation with the affected employees, this process could affect up to 47 employees whether through retrenchment or redeployment.”
More on mobile in South Africa
Telkom CEO announces wage freeze
Loading ...