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South Africa's Telkom to cut jobs

By , Editor, ITWeb Africa
South Africa , 11 Mar 2013

South Africa's Telkom to cut jobs

Struggling South African telecommunications firm Telkom has announced it plans to cut its staff numbers in the coming months.

In a statement, the company, which is listed on the Johannesburg Stock Exchange (JSE), has said it has “told employees that management and bargaining unit staff will be afforded the opportunity of applying for voluntary severance (VSPs) and early retirement packages (VERPs) from 15 March 2013 until 31 August 2013.”

The company says this follows formal consultations with internal and external stakeholders, such as trade unions – the Communication Workers Union (CWU), South African Communication Union (SACU) and Solidarity.

Telkom says the move is aimed at enabling it “to achieve its business objectives, secure 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,” said Thami Msubo, Telkom’s chief of human resources, in a statement.

“We endeavour to improve efficiencies and re-align skill levels with the changes in our business and network to deliver what our customers want. The VSP/VERP offer is the most efficient and non-invasive manner in which the company is able to begin effecting control on its headcount costs,” said Msubo.

Msubo has further said in the statement that “the decision to apply for a package is at the sole discretion of every employee.”

But the company says the employer also has the “sole discretion to accept or decline the application based on the business requirements.”

Job cuts, though, could be inevitable for the company, says Telkom.

“After the VSP and VERP window period closes, and if the process has not achieved the desired results, the company may embark on retrenchments,” said Msubo.

Business hit hard

Last year, Telkom recorded a 10.2% decrease in voice usage among its 181,000 fixed line subscribers, amid stiff competition from mobile operators such as MTN and Vodacom.

In the interim results for the period ended September 2012, Telkom’s year-on-year revenues also fell by 1.5%. Its earnings before interest, taxes, depreciation and amortisation (EBITDA) decreased by 17.7%, while its headline earnings were down by about 80%.

The South African government owns almost 40% of Telkom, while state-owned Public Investment Corporation (PIC) has a 10.89% stake in the firm.

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