Dual-listed telecommunications giant Telkom said in a statement on Wednesday that it has provided its recognised unions — the Alliance of Telkom Unions and the Communication Workers Union — with notice of its intention to start consultations next week on the reduction of a possible 1 381 jobs during this financial year.
As part of its ongoing drive to create shareholder value, Telkom said it continues to review, streamline and refocus its business in response to the changing market in which it operates.
“It does this by identifying growth opportunities and continuously improving efficiencies, productivity and containing costs,” the statement said.
Telkom said in line with this, the number of fixed-line staff is expected to decrease by between 7% and 10% a year over the next three years, and the company aims within the next few years to reduce staff costs as a percentage of revenue from 22,6% in 2003 to about 17%. Fixed-line employee expenses for the year ended March 31 2004 totalled R6,7-billion.
“However, headcount reductions are likely to be driven largely by natural attrition that is currently around 4,5%, and by voluntary severance and early retirement packages,” the company said.
Historically, involuntary retrenchments have only accounted for 1% of headcount reductions at Telkom, and it expected to see this trend continuing going forward.
“Involuntary retrenchments are a last resort, and Telkom remains committed to following socially responsible methods to enhance efficiencies in an increasingly competitive communications market in consultation with organised labour.
“The reduction of duplicated and redundant positions and the rebalancing of skills in Telkom is a business imperative driven by the need to maximise efficiencies and become more competitive in the face of increasing competition and the liberalisation of the telecommunications market,” said Telkom employee relations executive George Nkadimeng.
“We are seeing increasing substitution of fixed-line for mobile services, and we are expecting to lose a portion of the fixed-line market to the second network operator [SNO] once it has been licensed. Technological advancements are also informing our approach to managing our human capital requirements as we continue to deliver value to our shareholders,” he said.
He added that employees whose jobs become redundant will have a choice of going into Telkom’s Agency for Career Opportunities for up to 12 months with full pay and benefits while awaiting to be redeployed or reskilled within Telkom or elsewhere in the information and communication technology (ICT) sector.
Telkom said it will only explore the retrenchment route after it has exhausted the agency process.
The company noted that the ICT sector is growing, with a number of new players, such as the SNO and underserviced area licencees, preparing to enter the market.
The company added that it is engaging with all key players in the sector with a view to explore new career opportunities for employees who cannot be accommodated within the company itself.
The involvement of the Information Systems, Electronics and Telecommunication Technology Sector Education and Training Authority, partnering with ICT placement agencies, and cooperating with key suppliers on their employment needs are initiatives designed to minimise job losses, Telkom said. — I-Net Bridge