Last week’s financial results from fixed line telephone monopoly Telkom may have impressed market watchers, but its workers are up in arms about its plans to cut 7 000 jobs over the next five years.
In a letter to the company, the Communication Workers Union (CWU) demanded confirmation of remarks attributed to chief financial officer Anthony Lewis in which he said Telkom was ahead of schedule on staff cuts.
Mike Seroba, CWU deputy-general secretary, said Telkom was apparently reneging on its commitment to consult the union before implementing staff cuts.
“Telkom has [apparently] used its financial results to make its intention known instead of adhering to its commitment to consult us first,” said Seroba.
He claimed this flew in the face of an existing three-stage job security agreement with the union. Stage one was measures to avert retrenchments, followed by consultation on retrenchment issues and finally discussion of a viable job creation initiative to help compensate retrenched workers.
According to I-Net Bridge, Lewis’s comments were echoed by Telkom CEO Sizwe Nxasana during a conference call, when he said the group was looking to reduce its head count over the next three to five years from 35 000 employees to 28 000.
The group had cut its fixed-line staff by 4 000 over the past financial year. This formed part of its plans to bring its number of lines per employee in line with its peers around the globe.
Nxasana said Telkom wanted to increase this ratio — a standard measure of efficiency — from the current 137 lines per employee to between 150 and 170 in the medium term.
Telkom’s group executive for human resources, Oupa Magashula, this week said Telkom has “repeatedly stated that it will continue to review, streamline and refocus its business. The number of fixed-line staff is expected to reduce to around 28 000 in the next five years.”
Magashula added that this was likely to be driven largely by natural attrition, which, he said, stood at more than 5% this year. “Given the current fixed-line employee base, this means about 2 000 employees a year are likely to leave the company.”
He said of the 4 400 employees who had left Telkom this year, 52% had left because of natural attrition, 9% because of early retirement, 34% voluntary severance and less than 5% forced retrenchments.
“Natural attrition will be balanced with the company’s human capital requirements. Telkom remains firmly committed to the terms of the Job Security and Retrenchment Framework Agreement signed with the CWU in January 2002,” Magashula said.
He said an agreement had also been signed with the Alliance of Telkom Unions last August giving employees in positions identified as redundant the option to accept a voluntary severance package, early retirement, or the option of joining a “redeployment pool” through the purpose-created Agency for Career Opportunities.
Employees linked to the agency would be trained for vacant positions after a skills and training assessment.
According to Magashula, Telkom’s drive to minimise job losses was yielding positive results, with more than half the employees attached to the agency being successfully placed in “record time”.
Sixty-two percent of 37 employees at management level had been appointed internally through the agency, while 241 of the 451 employees who joined the agency had been placed.
On Monday Telkom reported a set of robust results, including a 10% rise in revenue to R37,6-billion and a 34% rise in net profit to R1,6-billion. It also reported headline earnings of 314c per share — up almost 5% from the previous year.
The results surprised the market, and the share price climbed 2,6%, or 96c, to R37,25 — its highest point since listing at R28.
Telkom has five million lines in South Africa and boasts a 50% stake in cellular provider Vodacom which has 8,6-million subscribers throughout Africa.
Ironically, Telkom’s fixed access lines have declined by 1,6%, from 4,92-million to 4,84-million in the past financial year because of a migration to cellphones.
Vodacom’s total cellphone customers have increased by 26%, from 6,56-million to 8,65-million.
Nxasana expected prepaid fixed-line customers to increase along with access to its Integrated Services Digital Network (ISDN) and Asymmetric Digital Subscriber Line (ADSL) — a high-speed, high-bandwidth digital service.