Telkom could cut 3 000 jobs – letter to unions

16th January 2020

By: Reuters

  

Font size: - +

Telecoms company Telkom told unions on Wednesday it could cut up to 3 000 of more than 15 000 staff as it struggles with declining performance in fixed voice and fixed data services.

Like other African telecoms firms, Telkom, in which the government holds a stake of about 40%, is trying to keep pace with a surge in demand for the internet and data with growing smart phone usage.

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, it said in a letter to unions seen by Reuters.

The telecom provider said it will consider voluntary severance and early retirement packages for employees affected by phase one of the job cut, which will affect employees at Openserve and the Consumer divisions from January to April.

The affected jobs include support employees, specialist, operational employees and supervisory and management levels in its wholesale division Openserve, the consumer unit as well as in its corporate centre.

The announcement comes two days after retailer Massmart Holdings, majority owned by US retail giant Walmart, said it could cut up to 1 440 jobs under a plan to close some stores as it struggles to grow sales in a tough economy.

Telkom, which runs South Africa’s biggest fixed-line telecom network, is migrating customers to mobile voice and data as well as fibre, where it is one of the small players in a market dominated by Vodacom and MTN Group.

"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.

"For Telkom to survive the current and anticipated tough trading conditions, it is imperative to seek and implement measures which will drastically reduce costs, eliminate inefficiencies and improve operational and financial performance in the interest of securing its continued commercial viability and employment for the majority of the employees."

Telkom said it wants a leaner structure in its Openserve and group IT division and a focused skills set in line with the new business demands of a mobile focused business. While in consumer, the unit needs to be more market driven and customer focused.

Edited by Reuters

Comments

The functionality you are trying to access is only available to subscribers.

If you are already a subscriber, you can Login Here.

If you are not a subscriber, you can subscribe now, by selecting one of the below options.

For more information or assistance, please contact us at subscriptions@creamermedia.co.za.

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION