Debt-Ridden Cell C Serves Retrenchment Notices to 2500 Employees

"All 2500 staff members have been served with retrenchment notices."

Cell C offices
Cell C offices in Midrand

The Information Communication Technology Union (ICTU) said on Friday that Cell C has served retrenchment notices to all its staff members.

ICTU is an affiliate of the South African Federation of Trade Unions (SAFTU), which is led by Zwelinzima Vavi.

The union is the sole worker representative at Cell C.

“Today, ICTU is having a meeting with Cell C management and their major shareholder, Blue Label Telecoms, at their BLT offices in Sandton,” ICTU spokesperson, Thabang Mothelo, told TechFinancials.

“Key issue is the possible retrenchment of 960 staff. All 2500 staff members have been served with retrenchment notices.”

JSE-listed Blue Label Telecoms owns 45% of the embattled mobile phone operator. Blue Label Telecoms and Net 1 have written down to zero the value of their stake in struggling mobile network, which last year reported an R8 billion loss in the year to June, hit by impairments.

Mothelo added that today, CCMA was scheduled to start its first consultative meeting but has been averted at the last minute.

Last week, Cell C announced that some 40% of its junior management and semi-skilled staff are facing the chop.

This retrenchment notification to workers follows retrenchments in the senior management team were 30 executives decided to take severance packages and Cell C successfully reduced its executive structure from 135 to almost 100.

Those retrenchments were to ensure that there was sufficient financial liquidity to support the recently appointed CEO Douglas Craigie-Stevenson’s turnaround strategy.

The cash-guzzling operator lost 2.9 million subscribers for the year ended December 2019. It also declared a loss of R3.94 billion compared to R7.36 billion in 2018.

The company also recently got a lifeline after the Competition Commission recommended conditional approval of the proposed acquisition of certain Cell C assets by special purpose vehicle Gatsby SPV. Gatsby is a ring-fenced newly incorporated special purpose vehicle which was incorporated for the sole purpose of entering into the proposed transaction.

TechFinancials was unable to reach Cell C for comment.

Also read: Cell C: A Hodgepodge Going Nowhere




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