Telkom's latest phase of restructuring, which a union believes could ultimately affect 10 000 employees, has cast doubt on the telco's ability to roll out a R98 billion broadband project.
Telkom yesterday told its 18 500 staff members it would again implement a "turnaround strategy" to "unlock efficiencies". This comes after it retrenched over 300 managers and 480 call centre staff last year, and 1 800 employees voluntarily parted ways with the company a few years ago.
This time, the firm's restructuring will see about 20 Telkom Direct stores closed, which could affect about 100 staff. Its call centre operation, warehousing and legacy IT systems will be moved to an outsourced provider, although it is not clear how many staff will be transferred. Telkom notes job losses will be minimised, and are a last resort.
Up in arms
Telkom's latest move has angered unions, with Solidarity fearing the endpoint will see the operator with only 8 500 staff. Spokesman Marius Croucamp explains the union arrived at this figure because Telkom benchmarks its staff efficiency level against that of Vodacom and MTN, which employ about 6 000 people. Telkom has denied the job cuts will be that severe.
Croucamp says the latest round of restructuring came as a "major surprise" because no information was shared with unions upfront. He says the news has led to "chaos" at Telkom. "I've never seen a company with that kind of climate before."
The union fears, with the amount of job losses at the state-owned operator - government has a 39% stake in Telkom - "there will be little left of Telkom in its current state", says Croucamp. Although the union initially misunderstood that field workers would be affected, this team is bound to be affected down the line, he adds.
Capacity constraints
This round of job cuts comes just days after president Jacob Zuma announced the telco would be the driver behind the state's broadband plan to connect offices in eight district municipalities in all provinces except Gauteng and the Western Cape. This project will reportedly cost the state R98 million, with the first phase planned for this year, but Telkom's current situation has caused doubt that it can drive this initiative.
"I fear they won't have the capacity to roll out the broadband project," says Croucamp. His concerns are echoed by Ovum analyst Richard Hurst, who says the retrenchments will derail many initiatives. He notes any restructuring process takes away staff and management's ability to focus on their strategic vision. "It couldn't come at a worse time."
The Communications Workers' Union (CWU) is also up in arms over the retrenchments, the timing and the alleged lack of consultation. President Clyde Marvin questions: "How can you retrench when government says: here is business for you?"
CWU is very angry over the move and is threatening to "go to the streets", says Marvin. He states the union will stop every possible retrenchment, as it is concerned Telkom will be left with no staff.
Telkom explains in its internal communication that its multi-year turnaround strategy seeks to deal with issues such as a deteriorating macro-economic environment, increased competition, and to arrest revenue decline and position it for future growth.
The communication, sent by human resources chief Thami Msubo, adds: "We are most aware that processes such as these are emotionally taxing and that it creates uncertainty among all affected employees. Our objective is to limit any disruption as far as possible. We will engage with the affected groups with fairness and focus, to ensure they are treated with dignity and respect, as we work through this process."
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