Telkom has abandoned a process of forced retrenchments for over 4 000 staff and is instead offering employees voluntary retrenchment packages.
Group CEO Sipho Maseko made the announcement to media in Johannesburg today and says all non-unionised full-time staff will be able to apply for voluntary severance packages from today until 27 July. Telkom made the announcement to its staff early this morning.
Following an urgent application by trade union Solidarity, the Labour Court last week ordered Telkom to halt its planned retrenchments and withdraw the Section 189 notices it issued to unions on behalf of about 4 400 workers.
Maseko says the company needs to continue with its business transformation strategy and cut costs by at least R1 billion a year going forward. Trimming staff numbers and upping productivity is its only option.
"My executive team and I believe these measures are necessary as our business is simply not sustainable in its current form. We must take urgent steps to place the business on a stable footing."
Maseko says between 40% - 45% of staff are non-unionised and will be able to take advantage of either voluntary severance packages or voluntary early retirement packages. Telkom says it plans to meet with Solidarity and two other unions later this week to continue with dialogue around restructuring. Voluntary packages could then be extended to union members if unions agree.
The fixed-line operator says it will continue with its turnaround strategy and is looking at other cost containment options. These include a wage freeze, reduced or flexible working hours, new methodologies to improve productivity and potential outsourcing options.
"Compared to similar-sized telecommunication companies, we have up to 30% more full-time employees than our peers. This makes it increasingly difficult for us to compete," says Maseko.
He says the operator does not know how many staff will opt for voluntary packages but the offer "will be significantly more generous than those required by law".
The abandoned forced retrenchment process would have seen as many as 4 400 Telkom employees retrenched, while a further 3 200 could have been redeployed to other companies.
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