Business Connexion (BCX) CEO Isaac Mophatlane this morning denied reports that the technology company plans to retrench staff, alongside other listed companies in the ICT space.
Reacting to news reports that the company is looking to axe 31 employees, in a bid to address "internal operational inefficiencies", Mophatlane says this is simply not true.
However, he did confirm BCX is experiencing job losses through natural attrition, while "poor performers" are also being shown the door in line with the Labour Relations Act.
BCX is in the process of being bought out by Telkom in a R2.67 billion bid, with the telecoms giant recently filing merger papers with regulatory authorities locally and in several other countries. This is one of at least two major consolidation deals that are taking place in the ICT space - the other being Vodacom's R7 billion buyout of Neotel.
However, even more companies in the ICT sector - including Telkom - are retrenching staff, as they struggle to remain profitable in tough economic conditions and a market where revenue streams are under ever-increasing pressure.
Telkom is laying off some 2 500 managerial level staff, as it aims to restructure its entire operations and cut costs, but many are expected to be rehired under the company's new structure.
South Africa's second-largest mobile operator, MTN, is also trimming its staff numbers at managerial level, citing poor returns and slow growth as reasons for the intended job cuts. Last month, the cellphone network operator indicated in a section 189 notice to employees that it intends to axe up to 847 employees, and market experts have warned retrenchments would continue for the foreseeable future.
South Africa's ICT sector - especially the telecoms space - has been described as mature and saturated, with analysts saying the heady days of unbridled profits are over. Thus, the current right-sizing should be viewed as a natural progression.
Meanwhile, labour organisations have expressed some suspicion about the reasons for retrenchments in the ICT sector, with some also suspecting more companies are laying off staff than what has been reported.
Labour unions Solidarity and the South African Communications Union previously expressed concern that consolidation within the market would lead to further job cuts, as companies seek to do away with duplication of skills, especially before the deals come under the scrutiny of competition authorities.
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