Embattled telecommunications group Telkom would, between March 15 and August 31, offer its management and bargaining unit staff the opportunity to apply for voluntary severance packages (VSPs) and voluntary early retirement packages (VERPs).

The JSE-listed company said its decision followed consultation with its internal and external stakeholders, including the Communication Workers Union, the South African Communication Union and Solidarity, who represent the majority of Telkom’s employees who form part of its bargaining unit.

The move was aimed at enabling Telkom to achieve its business objectives, as well as to ensure its sustainability and commercial viability by rebalancing its workforce in line with its strategic imperatives.

“The VSP/VERP offer is necessary as there is an urgent need for the company to address its human capital requirements, which impacts substantially and directly on the company’s cost base.

“We endeavour to improve efficiencies and re-align skills levels with the changes in our business and network to deliver what our customers want. [This] offer is the most efficient and non-invasive manner in which the company is able to begin effecting control on its headcount costs,” Telkom’s human resources head Thami Msubo said in a statement.

In response to questions, Telkom told Engineering News Online that the outcome of the VSP/VERP process would be not be assessed purely on the reduction of the number of employees, but on the overall impact on the company’s cost structure.

“This will be monitored continuously throughout the process to ensure that we reach the desired state of cost efficiency.

"This is a voluntary process, therefore we are not in a position to predetermine the outcome. The aim is to bring down the cost base of the company in realaiton to revenue," the group noted, while adding that employee costs made up about 50% of its operating expenses, excluding payments to other operators, cost of sales and depreciation.

Meanwhile, Msubo emphasised that, although the decision to apply for a package was at the sole discretion of each employee, Telkom still had the authority to accept or decline applications, based on the business and critical skills requirements.

He further indicated that if the company did not achieve its desired results following the closure of the VSP/VERP window period, it might embark on retrenchments.

“Future retrenchment processes and severance packages will be done in accordance with the Labour Relations Act,” Msubo added.