As part of its turnaround plan Telkom is planning to retrench close to 7 800 employees within two months, according to Solidarity Union.
Telkom’s net revenue rose 3.1% to R26 billion and net debt slashed 92,8% to R151 million in the year to end-March 2015, paving the way for it to reward its shareholders with a dividend and a special divided totaling 245 cents per share
There are hurdles along the way as the firm deals with its cost cutting exercise, which involves staff retrenchments and outsourcing, plus intense competition in the market.
Trade union Solidarity questioned the scale of Telkom’s retrenchment plans that were announced on Tuesday. At an information session in Olifantsfontein on Tuesday, Telkom announced its plans to get rid of an additional approximately 7 800 employees within two months.
Telkom’s plans include cutting its workforce by 4 400 through Voluntary Severance Packages and Voluntary Early Retirement Packages.
Earlier this year, 724 employees have already accepted packages.
If this new target is not met, forced retrenchments will follow in July to attain the desired number.
Another 3 400 permanent employees contract workers will be transferred to other companies. This is in addition to the 1 170 employees that have already been transferred through section 197 business transfer processes as several business portfolios within the company had already been outsourced.
“In February this year, Solidarity warned that major job cuts were looming,” said Marius Croucamp, Head of Solidarity’s Communications Industry. “We have been pressurising Telkom since the beginning of this year to come clean regarding the number of people that will be affected and we are still questioning whether this drastic action will put the company on a sustainable path.”
The union announced that it will question each and every job cut that will specifically affect its members, and it will demand that these job cuts must be motivated at company level as well as at departmental and service level in Telkom.
“If Telkom carries on in this vein, an empty shell is all that will remain of the company, and the inadequate service delivery that we are already experiencing will worsen as it will actually be the skilled employees that will be deterred by this major uncertainty.”