As Cell C embarks on another retrenchment process, MTN faces possible strike action, Telkom is in the midst of restructuring, and Vodacom continues to clamp down on costs as the mobile industry faces a "desperate" position.
Cell C, which has 1 084 staff members, yesterday confirmed it is restructuring in a process that could affect as many as 47 staff members, although trade union Solidarity is concerned that many more employees could be let go. Cell C's move follows similar recent action by Telkom and MTN to shed jobs, and commentators expect more job losses to follow.
Last year, MTN retrenched 476 workers and is now in the midst of another restructuring process in its enterprise unit, although the company has said it does not plan on cutting jobs. Telkom is also restructuring and plans to close 20 Telkom Direct stores, and outsource various functions such as its call centre, as it moves ahead with its turnaround strategy.
Vodacom, which also faces top-line pressure, does not currently have any plans to shed jobs, but has been implementing a cost containment programme, spokesman Richard Boorman confirmed this morning.
Steady progress
Solidarity spokesman Marius Croucamp says Cell C's move, which is the latest in a wave of telecoms job cuts, appears to be a bid to combine job functions and get fewer people to do more work. He adds the union is anticipating that Telkom's restructuring will move to its technical field force next, which will affect about 10 000 staff members.
Telkom notes it has, so far, outsourced its call centre, some supply chain services, and its managed print operation, and 441 staff have moved to the outsource providers. It is still in talks about closing 20 of its 95 Telkom Direct stores, and is discussing alternatives to retrenchments.
Croucamp adds MTN also seems to be facing "a lot of industrial action" at the Commission for Conciliation, Mediation and Arbitration (CCMA) over bonuses. ITWeb understands several Communication Workers Union members have successfully applied for a strike certificate over the company's refusal to pay call centre workers bonuses, and are aiming to strike on Tuesday.
MTN group executive for corporate affairs Chris Maroleng says the operator is aware of the concerns of some staff and it has taken note of the CCMA's permission for protected strike action. He adds the company is confident it will arrive at a constructive resolution to the impasse.
The customer service agents are taking MTN to task over its refusal to provide more bonuses, in addition to the 4% of salary ex gratia payment. MTN has explained bonuses were not allocated because MTN SA did not deliver the required level of growth and was not able to declare a performance bonus.
More to come
Croucamp says Cell C, which has just built a large head office, seems to be struggling, while Telkom will continue shedding jobs until it reaches its targets. "It's going to be non-stop until they've finalised what they want to do."
Telecoms companies are "taking drastic measures" and the union expects more downsizing and consolidation because the operators face a saturated market and are battling financially, says Croucamp. He points to recent contract price hikes as an example of the desperation telcos face.
Last month, MTN became the latest operator to announce price hikes to its subscription fees for contract customers and prepaid data bundles. The move, predicted by industry watchers, came in the wake of both Cell C and Vodacom hiking their prices in sudden turnaround moves that have elicited the ire of consumers.
Ovum analyst Richard Hurst adds telecoms operators are "between a rock and a hard place" and have to cut costs, the bulk of which comes from headcount. He anticipates more waves of retrenchments until costs reach an efficient level, and margins improve. "They've got nowhere else to go."
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