Ruthless Telkom has killed off 7,000 jobs in 3 years

Telkom has cut its workforce by more than a third since 2013 as part of a turnaround exercise which the company says it has now completed.

On Monday the company reported a 15.5% increase in headline earnings for the year ended March 2016, while operating revenue climbed 13.9% to R37.3 billion.

Normalised profit after tax reached R4 billion, compared to R3 billion for the previous period.

The board declared a dividend of 270 cents, up 10% on the previous year’s total dividend.

The market responded to the results, with the company’s share price advancing nearly 9% during trade on Monday.

Key financial highlights:

• Group net revenue up 4% to R28 billion
• Normalised headline earnings per share (HEPS) increased by 15.5% to 658 cents
• Operating revenue up by 14% to R37 billion
• Normalised EBITDA increased by 16% to R11 billion
• Capital expenditure increased by about 17% to R6 billion
• Normalised free cash flow of almost R4 billion

Retrenchments

During the year, Telkom said that 3,878 employees accepted voluntary severance packages (VSPs) and voluntary early retirement packages (VERPs) and a further 437 employees were affected by outsourcing.

As a result, employee expenses reduced by 10%, the company said.

“We have been mindful to retain key skills and attract new talent, especially scarce and business critical skills. Our investment in training and development is key to our efforts to transform our culture and ensure that we achieve our strategic objective of equipping our employees with the appropriate skills and experience to put our customers first in a very competitive ICT environment,” said Maseko.

Speaking at a presentation of the group’s results in Midrand, Maseko pointed out that since 2013, the company has seen its headcount decline from 21,210, to 19,200 in 2014, to 18,330 in 2015, and to 13,770 in 2016. Masekpo said that the actual number has reduced even further to approximately 12,500 currently.

As a result, employee expenses have declined from 9.28 billion in 2013, to 7.91 billion in 2016.

Maseko said he does not foresee any further reductions in staff numbers as the company has largely completed its turnaround strategy. “We have made sure that we have kept the right people,” he said.

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