Massive retrenchments at Telkom: report

 ·16 Jan 2020

Telkom has informed trade unions and staff that it could cut up to 3,000 of its more than 15,000 employees as it struggles with declining performance in fixed voice and data services.

In a letter seen by Reuters, the company said that it is also grappling with organisational and operational inefficiencies linked to fixed voice and data services, which require more staff to install, maintain and market.

Telkom said it will consider voluntary severance and early retirement packages for employees affected by phase one of the job cuts.

Employees from the Openserve and consumer divisions are set to be the most affected during this phase. This includes:

  • Support employees;
  • Specialist;
  • Operational employees;
  • Supervisory and management levels in its wholesale division Openserve;
  • The consumer unit;
  • The corporate centre.

“The deterioration in the economic climate, increased operational, regulatory and competitive constraints, coupled with continuing rapid migration from fixed voice and data business have all had a major ongoing negative operational and financial impact on Telkom,” it said.

The company has continued to cut staff in recent years, declining from just over 67,000 in 1991 to 23,000 in 2010. The group had 15,296 permanent employees according to its March 2019 annual report.

The trend coincides with Telkom’s loss of fixed-line customers, as users move away from telephone landlines and DSL broadband connections – taking up fibre from competing companies and mobile deals from the likes of Vodacom and MTN, and Telkom’s own mobile division.

A Telkom spokesperson confirmed to BusinessTech Telkom that it has served unions with letters regarding the Section 189 process.

“Telkom will continue to consult with the unions, and it is our hope that through considered engagement with the unions, we will come to a mutually beneficial solution.

“Out of respect for our employees, we will share information once we have engaged further with our employees and unions,” the spokesperson said.

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