Telkom has published its interim results for the six months ended September 2018, revealing how many employees have left the company in recent years, as the group continues its cost cutting and journey and the ‘evolution’ of its skills
The group reported operating revenue up 5.2% to R20.8 billion, with headline earnings per share (HEPS) decreasing by 3.3% to 288.0 cents per share.
According to the group, the drop in HEPS was mainly due to voluntary early retirement package (VERP) and voluntary severance package (VSP) costs in the current period.
Telkom has dredged through several retrenchment cycles over the years in its bid to improve efficiencies and cut back on costs.
In the latest interim period, the group initiated a voluntary severance and retrenchment process through its ICT company, BCX, which resulted in a provision of R282 million relating to the scheme being recognised, and a related tax impact of R80 million.
Telkom has reduced its headcount in its main consumer business (Telkom Company) from over 21,200 people in FY 2013, to 9,952 at interim 2018 – a loss of 11,248 people.
However, at a group level, Telkom merged with BCX in 2016, which added almost 8,000 employees to the group.
The group staff count in its latest financial report totals 17,862 – down from the 21,209 in 2013, meaning a net loss of 3,347 employees over the period.
Compared to the previous interim period, Telkom Group has seen a reduction in staff across all operations, with the exception of its fibre business, OpenServe.
More staff cuts on the cards
Telkom CEO Sipho Maseko has indicated that the group’s staff-cutting journey will continue.
Commenting on the latest results, Maseko said that the group is moving to review its ‘operational capabilities’ – and may reorganise functions, identify skill gaps, and look at possible redundancies in its workforce.
“Telkom acknowledges that the external environment including technology advancements, regulatory changes and increased competition have driven the need for an internal review of the environment.
“This will allow us to become more flexible and responsive in how we, as an organisation, cultivate distinct cultures that advances competitive advantage,” he said.
According to Maseko, the group’s focus is on creating efficiency and effectiveness in the business and achieving its operational goals through “human capital investments”.
“This may include the reorganisation of functions, identification of skill gaps and, in certain instances, possible redundancies,” he said.
“Where we have identified gaps, we continue to be deliberate about the process to close out and generate value.”
Earlier this month, BCX staff were informed by the company’s CEO Jonas Bogoshi that the company has started a “section 189 process” – which refers to the retrenchment of staff due to operational requirements. The process is said to affect approximately 790 employees.
BCX continued to weigh on Telkom’s results, with revenue down 4.3% to R10.22 billion, mainly attributable to the decline in voice revenue which was down 11.9%.