Johannesburg - Shares of South Africa's Telkom SA rose on Wednesday after its chief executive told a newspaper he aims to cut 1 billion rand in annual costs for the next five years, as part of a drive to turn around the operator.
Telkom, South Africa's largest fixed-line operator, will not be able to avoid job cuts, Sipho Maseko told Business Day, adding he would begin discussions with trade unions next week on possible job cuts.
“It's clear in my mind that Telkom will shed a bit of weight,” the newspaper quoted Maseko as saying.
“We are way out of shape in so far as revenue to staff is concerned. We will have much more thorough conversations.”
Maseko has been on a drive to bring down costs since he was named as chief executive last year, becoming the sixth chief executive of the company since 2005.
Telkom, which is controlled by the government and the state-owned pension fund, has also been asking suppliers for discounts and reducing its vehicle fleet.
Maseko said in November Telkom had let go of 9 percent of its workers, adding it could do with fewer managers.
Like other fixed-line operators, Telkom has seen its market share eroded by mobile rivals.
Shares of Telkom rose 2.2 percent to 37.61 rand at 13:32 SA time. - Reuters