MTN mum on SA job cuts

MTN SA CEO, Zunaid Bulbulia says that MTN is currently reviewing many avenues of cost reduction, “and is not limited to headcount”.

An industry source told BusinessTech that MTN South Africa was in the process of culling “a big number” of its staff in South Africa, but the group refused to comment on how many.

“MTN are currently reviewing many avenues of cost reduction. This involves a detailed review across various disciplines in our business and is not limited to headcount,” Bulbulia told BusinessTech.

“MTN will follow the appropriate provisions of the labour legislation if any specific activity is contemplated regarding its contracts of employment with affected staff,” he said.

MTN’s local operation has begun to feel the effects of increased market competition in SA, and admitted as much in a results presentation in August.

“MTN South Africa felt the effects of weaker consumer demand and was slow to respond to aggressive price competition in both voice and data offerings,” MTN said.

MTN Group reported a marginal improvement in revenue for its South African operation in interim results for the six months ended June 2013, to R20.14 billion, from R19.86 billion before.

However, earnings before interest , taxes depreciation, and amortisation (ebitda) declined to R6.5 billion, from R7.03 billion in 2012.

The group also noted that its total subscriber base for South Africa declined by 420,000 to 25 million, having reported a decline of 470,000 customers in the first quarter.

MTN said in a August that it was mulling over job cuts to mitigate costs. Bulbulia told a media gathering that MTN in SA would look at its outsourced segment, and not permanent staff members.

Themba Nyathi, MTN SA’s human resources executive, told Business Report: “About 15% of MTN SA’s staff are contractors who perform, among others, outsourced functions. As we rationalise and automate certain areas of our business in pursuit of operational efficiencies, some contract functions will naturally become redundant while others will be carried out in-house.”

At close of trade on the JSE on Friday (13 September), MTN’s shares were priced at R188.20, down from a high of R200.90 achieved a month ago (11 August).

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MTN mum on SA job cuts