SA's second national fixed-line operator, Neotel, has confirmed it may retrench staff as the company is not performing in line with expectations.
Neotel says a process of staff consultation will start mid-January, and employees will be asked to provide input as to how the telco can improve operationally. Some jobs will be made redundant, but staff may be moved around within the company.
The fixed-line operator says it needs to go through a process of realignment, because the market is not currently conducive to growth, and it is behind its internal expectations. When Neotel launched in September 2006, it expected to gain about 15% of Telkom's clients within five years.
CEO Ajay Pandey said in September the company was on track to turn over at least R2.5 billion during its current financial year. By its September half-year, the company had reached R2.2 billion in revenue on an annualised basis, he said.
Pandey added that Neotel was still targeting 15% of Telkom's fixed-line base by the time it turned five, and would expand its services more aggressively into the consumer segment.
Neotel expected to have about 50 000 subscribers by March, its financial year-end, which Pandey conceded in September was a bit behind where the telco wanted to be.
Neotel says the realignment process will be conducted in accordance with SA's labour law, and the company is likely to have a clear picture of whether staff will be retrenched - and the number of employees affected - by the beginning of February.
Any possible retrenchments will take place by the end of April, says Neotel.
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