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Telkom plays down looming job cuts

Admire Moyo
By Admire Moyo, ITWeb's news editor.
Johannesburg, 01 Mar 2016
Telkom estimates about 300 jobs will be lost as part of the company's multi-year turnaround.
Telkom estimates about 300 jobs will be lost as part of the company's multi-year turnaround.

Telkom has downplayed reports it is looking to cut roughly 40% of its entire workforce.

Citing an internal document from Telkom, yesterday Bloomberg reported the former fixed-line monopoly plans to shed more than 6 000 jobs by July as it grapples with declining revenues.

In 2006' Telkom had 25 575 employees' compared to about 14 000 now. According to the Bloomberg report, Telkom identified 6 050 positions that it wants to eliminate from a total workforce of 13 895. Those include outsourcing 3 750 positions and moving 2 000 to Business Connexion, which Telkom bought last year.

Jacqui O'Sullivan, managing executive for group communication at Telkom, told ITWeb the document Bloomberg has is an internal strategy document that was shared as a first version, with the CFO and CEO, on 1 February 2016.

According to O'Sullivan, the document has changed quite a bit since then. "The numbers the Bloomberg piece quote made an assumption that the potential outsourcing of the networks divisions will go ahead."

No decision

She points out that towards the end of last year, Telkom issued a number of 'requests for proposals' (RFPs) to allow the company to consider options regarding the potential outsourcing of sections of the networks team, including potentially the large base of technicians.

"Responses to those RFPs are currently being considered. No decision has been made and it is, therefore, premature to speculate on the possible outcome when analysis is still under way," says O'Sullivan.

However, she says as part of Telkom's multi-year turnaround, the company yesterday announced a restructuring of its corporate centre, through a Section 189 process.

The company yesterday informed unions of its intention to pursue a Section 189 process, within its corporate centre, which may impact approximately 300 people. In addition, Telkom plans to outsource in the region of 260 roles in its shared service environment through a parallel Section 197 (outsourcing) process. The Section 197 process involves the outsourcing of roles and no jobs will be lost, says O'Sullivan.

Telkom's first CCMA-facilitated consultation on the current Section 189 process will begin on 8 March.

"We have made important progress on our turnaround in the past two years but we still have a lot to do. We have to change and improve the way we work and how we deliver products and services to our customers. Our new operating model is driving this and while these changes are never easy, the streamlining of our corporate centre is an important step in delivering a sustainable and growing Telkom," says Sipho Maseko, Telkom Group chief executive officer.

"Telkom's operating model must focus on delivery. The existing model is too cumbersome and it is weighed down by inefficient processes and systems that are not helpful to our customers. By creating more autonomous business units, we establish a clear sense of focus in each business, where commercial sustainability is the driving force, with clearer decision-making responsibilities that foster delivery," O'Sullivan notes.

She adds that part of creating that operating model requires Telkom to streamline the corporate centre and to push more resources into the business units.

"This process will create some excess staff in our corporate centre which necessitated the initiation of a Section 189 process with organised labour. We estimate that 300 jobs will be lost through this current S189 process."

Unions react

Trade union Solidarity yesterday confirmed Telkom had issued a notice of retrenchment to trade unions.

Solidarity deputy general secretary Marius Croucamp says: "This is the 10th consecutive year that Telkom is downsizing jobs by means of either retrenchments or offering severance packages."

Telkom says it is functioning in a deteriorated economic and operating environment driven by lower commodity prices and a weakening rand.

Last year, when Telkom announced a deal for employees to leave the company voluntarily, it was reported the process would cost R1.1 billion. The company was flooded with requests for staff to take advantage of voluntary retrenchment packages put on the table by the telco.

Meanwhile, trade union body Cosatu has slammed the imminent job cuts at Telkom. The labour body accused the company of failing to consult with stakeholders such as the Communication Workers Union (CWU) and negotiating in bad faith.

"We agree with CWU that this crude stunt by Telkom is a sneaky attempt to subvert the wage negotiations process'" Cosatu said in a statement yesterday. "The cuts in real wages' retrenchments and widespread casual labour are a sign that government needs to act.

"This action by Telkom makes a mockery of government's commitment to create jobs and also improve the country's telecommunications infrastructure. Telkom is not acting in line with the state's developmental agenda but it is only focusing on generating profits at the expense of the workers.

"The president correctly and progressively committed government to end outsourcing in the ANC's 2015 January 8th statement. Government has also repeatedly stated it will never retrench any worker and they must therefore support their words with action by decisively acting to stop this attack on workers."

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