By Staff writer
Telkom, which is undergoing a series of interventions to fix the ailing business, is turning to outsourcing to cut fat in the company as part of its turnaround strategy and on Thursday named its partners to take over the running of the non-core assets. They include Barloworld Logistics, Bidvest and WNS.
The company has been engaging with organised labour on the outsourcing of various business elements, as announced in February.
Telkom revealed on Thursday that it has identified a series of actions to unlock further cost efficiencies and improve customer service, in line with the company’s multi-year turnaround strategy. One such action involves outsourcing certain assets as going concerns.
Telkom’s call centre operations and staff are to be outsourced, as well as certain legacy IT billing systems, an internal printing division and the network and operations and retail supply chain sections.
Telkom has completed a stringent procurement process and has identified WNS as its preferred partner to undertake Telkom’s fixed line call centre operations.
Telkom spokesperson, Jacqui O’Sullivan, said the outsourcing was a critical step in Telkom’s focus on the customer.
“To succeed, everyone at Telkom has to put the interests of the customer at the heart of everything we do. Our customers are the core of our business, but running call centres is not. We know that customers will benefit from a focused and consistent service that a professional call centre organisation can offer. For this reason, we are confident this is the correct action to take,” she said.
Similarly Barloworld Logistics has been identified to undertake the management of 25 Telkom warehouses in the supply chain area of the business.
It is proposed that the IT legacy systems will be managed by ASAJE. Bidvest has been identified to take over internal printing services, and Ingram Micro the supply chain in the retail area of the business.
The outsourcing will only affect 1 300 Telkom employees.
The company said it is committed to a fair, objective and transparent process involving organised labour.
Sipho Maseko, who was appointed in 2013 as Telkom boss, has been seeking ways to cut fat in the business, a necessary step as this bulge has drained its profitability for years and led to a number of executives being axed when they couldn’t rescue the business.
Since he was appointed, Maseko and his executives in Pretoria have been quietly plotting ways to cut Telkom’s costs and haul the company back into the black.
He hopes to save as much as R1bn every year through cost cutting, a move that will inevitably include layoffs. Over five years, this means Telkom could save R5bn — enough to regain its profitability, and provide shareholder value.
What is clear, however, is that the “painful steps” that Maseko is prepared to take will place him and the company on a collision course with the unions, and it could be quite a dramatic run-in.
However, the company on Thursday assured workers that retrenchments will be a last resort. “When Telkom initially embarked on its turnaround strategy, the Company stated that it would look at alternatives, such as joint ventures, to ensure that job losses would only be implemented as the last resort.”