Telkom to cut staff in half to lower costs - union
Telkom will cut about half of its workforce as Africa’s largest fixed-line phone operator seeks to reduce spending and help stabilise the business, according to a labour union.
Telkom will start the process of firing more than 9 500 of its 19 000 employees within the next six months and will focus on the field-services division, South African Communications Union general secretary Karriem Abrahams said by phone on Monday. The company isn’t planning to remove this number and hasn’t specified a figure for reduction, spokesperson Pynee Chetty said in an emailed response to questions.
“We are going to court,” Abrahams said. “Last year Telkom made an R11-billion loss. This year there’s a R3.9-billion profit. Last year there wasn’t a need to retrench.”
The Pretoria-based company plans to reduce costs by R5-billion through eliminating jobs after it halted years of sliding sales partly caused by falling fixed-line usage. It had planned to cut a third of its employees, chief executive Sipho Maseko said late last year. Telkom is meeting unions on July 10 and 11, the union said in an emailed statement.
Maseko earlier this month predicted stable revenue through 2017.
“Telkom dismisses the speculation that it intends to retrench 9 500 employees,” Chetty said. “The company is not targeting specific numbers of individuals. The aim is to reduce the number of management layers and achieve an employee cost- revenue ratio of 25% over the next five years.”
Telkom gained 0.3% to R48.76 as of 9.53am in Johannesburg on Tuesday, the highest price since May 2009. The stock has increased 74% this year, the best performer on the FTSE/JSE Africa All-Share Index after Sibanye Gold. – Bloomberg