Telkom held a consultation meeting with labour unions and employees last week, outlining how new technology and free apps has impacted the company and are partly to blame for job cuts.
In a presentation on Wednesday (5 February), Telkom said that the impact of changes in technology – from copper to fibre – has had a direct impact on the company’s profit margins.
It said that these newer technologies have changed the nature of competition and that services that made money for Telkom such as SMS are now being replaced by over the top (OTT) services such as WhatsApp as people opt for free alternatives.
While Telkom said that it is investing in these new technologies to secure the company’s future, it noted that the return on this investment is at lower margins.
In January, Telkom 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.
The company said that it is grappling with organisational and operational inefficiencies linked to fixed voice and data services, which require more staff to install, maintain and market.
“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,” a spokesperson said.
“Out of respect for our employees, we will share information once we have engaged further with our employees and unions.”