Telkom dismisses massive job cut claim

Telkom has dismissed claims by the South African Communications Union that it will be firing 9,500 of its 19,000 employees, saying the group is not targetting a specific number in its retrenchment process.

According to a report by Bloomberg, in an email statement sent out on Monday (7 July) Sacu claimed that Telkom would be starting the process to effectively cut its workforce in half within the next six months.

The union threatened to take the fixed-line operator to court over the move; however, the company has outright dismissed the claim.

“Telkom dismisses the speculation that it intends to retrench 9,500 employees,” Telkom spokesman Pynee Chetty told Bloomberg.

“The company is not targeting specific numbers of individuals. The aim is reduce the number of management layers and achieve an employee cost-revenue ratio of 25% over the next five years.”

In its last financial reporting, Telkom indicated that over the last reporting period it had reduced its total employee count by 9.5% to 19,197, from 21,209 before.

It is currently underway with its “Fit for the Future” restructuring process, which the group aims to have complete by 1 August 2014.

The telco has said that 2,635 management staff will be affected by a restructuring process which forms part of its “Fit for the Future” project with the firm intending to shrink its “management layer” by as much as 25%.

Unions have put the number of expected retrenchments at 1,000 senior employees.

In an interview with Talk Radio 702 in May, Telkom CEO Sipho Maseko 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.

The company aims to save R5 billion in costs over the short to medium term.

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Telkom dismisses massive job cut claim