Trade unions greeted the listing of Telkom on Tuesday with disquiet, amid reports of another round of large-scale jobs cuts at the fixed-line telephone operator.
A company representative was quoted on Monday as saying the company’s current number of fixed lines per employee averaged 125 but the company would like this to match international benchmarks of 170 lines per employee.
A business daily calculated that this could cost up to 10 000 employees their jobs. Federation of Unions of SA general secretary Chez Milani greeted news of the listing price of R29 with the response that it was ”a far cry from R49,” the price mooted before the international telecoms price meltdown in 2000.
”It may have been wiser to wait for a more bullish market in order to ensure that the company is not sold off below its worth,” he added. ”One can only sell off the family silver once.”
”We also condemn the news that 10 000 jobs may be lost in the next few years as dismal testimony to the failure of privatisation in the South African context.
”Telkom is again playing down the retrenchments as a means to improve service delivery. For us the cutting of jobs is highly problematic in an environment such as ours with high unemployment,” Milani said.
Congress of SA Trade Unions (Cosatu) representative Vukani Mde said the entire listing process had been flawed from the beginning. ”One suspects that the only reason government is pursuing this thing is that they have committed themselves to private investors.”
Issuing a word of warning to Telkom’s small investors, numbered around 127 000, he said: ”the ride is only going to be rough for the small investors who spent their hard-earned cash to buy shares. People should not forget that foreign investors want immediate returns and if it means cutting jobs, so be it.”
Communication Workers’ Union first deputy president Karthi Pillay, quoted in Tuesday’s edition of the Business Report newspaper, said the ”whole thing reconfirms our anti-privatisation strategy and its dangers of the loss of jobs in the sector.
Government’s strategy is to use cost-cutting measures in order to make listing conducive to bidders”.
The paper on Monday reported that Telkom measured its operations against telecoms companies in South America, central and eastern Europe and some Asian countries.
Belinda Williams, Telkom’s head of investor relations, told the paper the utility had spent R7,1-billion on employees last year. Over the last three years it has spent R808-million in retrenchment costs after it reduced its workforce by nearly 10 000
employees.
”The efficiency ratios have to improve,” she said. ”It will be done in a responsible way. We have agreements with the unions on the process and I think we have their support.” – Sapa