Telkom spends R2.2 billion on job cuts
Telkom has issued a trading statement notifying shareholders that it expects its full year headline earnings to decrease by as much as 50%.
According to the telco group, the reason for such a big dip is due to a R2.2 billion payout to employees who took a voluntary early retirement package or voluntary severance package in the past financial year.
The R2.2 billion is not considered a part of normal business operations and carries a tax impact of R500 million. Excluding the package payouts, headline earnings will reflect a 10%-20% increase, Telkom said.
The group issued the following notice:
| 31 March 2015 (cents) | 31 March 2016 (Expected – %) | 31 March 2016 (Expected – cents) | |
|---|---|---|---|
| Basic earnings per share (reported) | 607.7 | 20%-30% lower | 122 to 183 cps lower |
| Basic earnings per share (normalised) | 584.1 | 30%-40% higher | 175 to 233 cps higher |
| Headline earnings per share (reported) | 597.9 | 40%-50% lower | 239 to 299 cps lower |
| Headline earnings per share (normalised) | 574.3 | 10%-20% higher | 58 to 115 cps higher |
The main difference between BEPS and HEPS is increased profit from the sale of property recorded during the twelve months to 31 March 2016, Telkom said.
Telkom has engaged in as many as four separate labour processes over the past few years in a bid to reduce costs at the company. The process has seen as many as 7,350 job cuts at the group since 2013.
The company’s workforce was at 13,895 as of 29 January, according to a Bloomberg report. Telkom’s staff count in 2015 was put at 18,333 – down from 19,197 in 2014, and 21,209 in 2013.
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