Telkom CEO Sipho Maseko says he aims to conclude the much-publicized retrenchment process of managerial employees before the end of June.
It is anticipated that 2,635 management staff will be affected by the restructuring process, with Telkom intending to shrink its “management layer” by as much as 25% as it looks to save R5 billion in costs over the short to medium term.
While Telkom has not identified number of people who will be affected, unions put the number at 1,000 senior employees.
In an interview with Talk Radio 702, Maseko, said: “Clearly we are looking at all of the drivers of inefficiencies and under performance at Telkom.”
“We have looked at our third party spend, we have looked at our overall capital expenditure, where it is that we are wasteful, and clearly, what is indicated by everything that we have looked at, is that we also have to look at the number of people we have, but more importantly at management level.”
He said that, between the customer and top management, Telkom has approximately 13 layers, whilst its competitors had between eight and nine.
Maseko said that the layers generate a lot of complexity, adding that he is trying to create an organisation where leadership was closer to customer issues.
“We want to reduce the number of layers between customers and the executive team, and in a sense, simplify how we work, and take complexity out,” Maseko said.
“We are trying to reduce the number of management layers that we have in the organisation, which has created an onerous financial burden to the firm,” the chief executive said.
Maseko defended his position against union complaints over a lack of proper consultation.
Maseko noted that there are three unions the group is consulting with; namely, the Communication Workers’ Union (CWU), the South African Communications Union (Sacu), and Solidarity.
He said these unions are largely represented in the bargaining unit. “We are not touching the bargaining unit,” Maseko said, “because the positions affected were management ones.”
“There might be a few odd members who belong to trade unions, which is okay, but the bulk of the constituency is in the bargaining unit.”
“In this instance we have not even begun to look at the bargaining unit, we are just looking at the burden at the top, the bubble at the top that is weighing heavily on the organisation,” Maseko said.
The chief executive said that Telkom is currently in a consultation process; “we have consulted with the affected members of staff,” he said.
He said that following necessary feedback, the group would then move to the final phase of implementation.
“We are hope that we will be done by the end of June, 1st of July, going live with the new organisational structure.”
Telkom is currently in a closed period and is expected to publish its annual results on 13 June, 2014.