Telkom CEO announces wage freeze
Telkom CEO Sipho Maseko says that the listed operator will consider a wage freeze as it continues to engage with unions on its plans to reduce its staff content.
The salary freeze would extend to management. “Management must taste first, the medicine,” Maseko told media in Rosebank, Johannesburg on Monday.
“I can’t see it applying any other way, across the board.”
In its latest turnaround strategy, dubbed ‘Telkom 2.0’, the fixed line operator announced that it plans to cut 4,400 jobs through voluntary severance packages or voluntary early retirement packages.
However, on Wednesday (8 July) the Labour Court ordered Telkom to withdraw the Section 189 notices which were issued to organised labour, resulting in the process being halted altogether.
“We have adhered to the Court Order by formally withdrawing the Section 189 notices issued to organised labour, thereby stopping the Section 189 process altogether,” Maseko said last week.
“Although the events of yesterday is a setback, it is only a temporary stay in our attempt to steer the company towards a financially sustainable future.”
On Monday, Maseko reiterated 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 said that the company needs to strip out at least R1 billion a year, noting that with earnings remaining relatively flat, the company needed assess its costs.
He noted that competition “is getting very fierce”, pointing particularly to a merger deal between Vodacom, and fixed line operator, Neotel.
Maseko said that the business was committed to engage with organised labour. He said that Telkom would hope to meet up with trade unions later this week or early next week.
However, he said that the company cannot stand still, and 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.
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