SOUTH AFRICA - Cape Town - 17 January  2020 - Massive retrenchments at Telkom.Telkom has informed trade unions and staff that it could cut up to 3,000 of its more than 15,000 employees as it struggles with declining performance in fixed voice and data services.  Photographer Lalinka Mahote/African News Agency (ANA)
SOUTH AFRICA - Cape Town - 17 January 2020 - Massive retrenchments at Telkom.Telkom has informed trade unions and staff that it could cut up to 3,000 of its more than 15,000 employees as it struggles with declining performance in fixed voice and data services. Photographer Lalinka Mahote/African News Agency (ANA)

Telkom to axe 3000 more jobs from May, totalling 6000 - Fedusa

By Dineo Faku Time of article published Jan 20, 2020

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The Federation of Unions of South Africa (Fedusa) on Friday said that Telkom has more retrenchments on the cards and will be axing 3000 more employees from May, bringing planned job cuts to 6000 at the partially state-owned company.

Fedusa and the South African Communications Union (Sacu) on Friday called on the government to axe Telkom’s entire board. The Information Communications and Technology Union (Ictu) also said the board should be disbanded.

When contacted for comment on Friday, Telkom said: “We unfortunately cannot comment on the views of other organisations.”

Telkom issued a formal notice of its intention to retrench 3000 workers to organised labour last Wednesday.

The unions are fighting the planned retrenchments, charging the company with a failure of corporate governance.

Fedusa’s acting general secretary, Riefdah Ajam, said on Friday that Telkom’s plans to outsource services would likely see a further 1000 employees facing retrenchment in May, while about 2000 could lose their jobs at Telkom’s IT subsidiary, Business Connexion (BCX), thereafter.

Ajam blamed the board for the alleged lack of strategic direction.

“Despite Telkom’s share price going down about R100 to R20, the chief executive and his executive management awarded themselves handsome bonuses at the end of last year. This is outright shameful and only affirms the analogy Fedusa emphasised in November 2019 that Telkom in fact holds the title of being the main architect of retrenchments in South Africa, considering the demise of the working-class employees from 69000 to a meagre 10000 currently,” she said.

Telkom has cited the weak economy and the declining performance of fixed voice, which previously made up more than half of Telkom’s gross revenue. Telkom’s net debt increased to more than R11.7billion in the six months to September from R8.8bn in March.

In the six months to September, Telkom declared an interim dividend of 71.5cents a share, and said its mobile division had posted revenue growth of almost 57percent.

Sacu organiser Keith Aimes said on Friday that, in addition to the first phase of the retrenchments involving 3000 employees the Openserve and consumer divisions, further retrenchments were on the cards.

Aimes said the second phase of the retrenchments would likely impact 800 employees in the corporate centre between in May, and 2000 BCX employees would be retrenched later in the year.

Telkom acquired cloud-based service provider BCX for R2bn in 2014.

“BCX has not made a profit since 2014,” said Aimes, questioning Telkom’s strategy.

“The current Telkom board should be dismissed with immediate effect and equally be declared delinquent for their contributory roles in failing to avert the possible demise of Telkom,” said Aimes.

Ictu president Origenous Mogoatlhe on Saturday said the Telkom board must be held responsible for allowing Telkom chief executive Sipho Maseko to use millions of rands to throw people into poverty and unemployment.

“These are monies, together with his huge bonuses he gives himself, that should have been used to sustain jobs for the next 10 years,” Mogoatlhe said.

In December, the company, which is 40percent state-owned, informed the market that its proposed takeover of debt-laden Cell C was off the table after receiving written notice from Cell C’s board of directors rejecting its non-binding proposal.

Telkom shares closed 0.44percent higher at R36.65 on the JSE on Friday.

BUSINESS REPORT 

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