Telkom may shed over 1 300 jobs

By Rodney Weidemann for Telkom

Johannesburg, 15 Jul 2004

Up to 1 381 Telkom staff may lose their jobs during the course of this financial year, although the monopoly still has to enter into discussions with trade unions.

Telkom is expected to begin consultation with the Alliance of Telkom Unions and the Communication Workers` Union next Tuesday and Wednesday, with a view to discussing the streamlining and refocusing process that could result in the job losses.

Danie de Wet, a spokesman for trade union Solidarity, has described the company`s intention as "absurd", particularly in view of the fact that it reported a record profit earlier this year.

He also pointed a finger at Telkom executives` pay packets, saying the bonuses worth R48 million - awarded to directors and upper management - would have been better spent on retaining the services of the workers facing dismissal.

However, Andrew Weldrick, Telkom`s senior manager for media relations, says: "The job reductions are driven by market dynamics, since Telkom is facing up to strong competition, particularly from the mobile arena.

"We are also anticipating the loss of further fixed-line market share once the second national operator is licensed, while improvements in technology and the automation of systems is another factor that is affecting jobs."

He says that in line with this, the number of fixed-line staff is expected to decrease by between 7% and 10% a year over the next three years, and the company aims within the next few years to reduce staff costs as a percentage of revenue from 22.6% in 2003 to around 17%.

Fixed-line employee expenses for the year ended 31 March 2004 totalled R6.7 billion.

"There is also quite a number of reductions that are driven by natural attrition - currently around 4.5% - and by voluntary severance and early retirement packages," he says.

Telkom claims that employees whose jobs become redundant will have a choice of going into Telkom`s Agency for Career Opportunities for up to 12 months with full pay and benefits, while awaiting to be redeployed or reskilled within Telkom or elsewhere in the ICT sector.

The company is engaging with all key players in the sector with a view to exploring new career opportunities for employees who cannot be accommodated within Telkom, and "we have had a fair level of success with the career agency up to this point," says Weldrick.

"Involuntary retrenchments are considered to be a last resort, and Telkom will only explore the retrenchment route after it has exhausted the agency process.

"Any talk of job losses is painful, but Telkom is adopting a sensitive stance to the issue and is consulting fully with the various trade unions - we are certainly not going to just be putting workers out on the street," he says.