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Telkom needs urgent cost-cutting, but plans not finalised

Telkom CEO Sipho Maseko

Telkom CEO Sipho Maseko

13th January 2014

By: Natasha Odendaal

Creamer Media Senior Deputy Editor

  

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Telkom on Monday reiterated the need to cut costs to turn the embattled telecommunications firm around, but noted that no action regarding reported staff cuts had been undertaken as yet.

Sipho Maseko, who took over as CEO of the group on April 1 last year, had initiated several strategies to arrest the company’s decline through various cost-cutting initiatives, including possible job reductions, and set the group back on a path to profitability.

Over the past few years, Telkom had been besieged by declining revenue, a Competition Commission penalty, a high cost structure, damaged reputation, difficult relationships with government, an unfavourable regulatory environment, a weak mobile position, customer service issues and brand perception difficulties.

Newswire Bloomberg reported last week that the embattled firm aimed to shed about 1 000 managers and cut back its 21 000-strong workforce by a third within five years.

Telkom said while a decision regarding staff reduction has not been reached, employees and the market had been “made aware of the endeavour to improve efficiencies”.

“To this end, the reduction of staff costs has been reviewed and proposals regarding the approach to be implemented are still under consideration,” the group stated.

Telkom said it would, prior to any implementation and at the appropriate time, engage relevant stakeholders.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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