Telkom plans management job cuts

By Rodney Weidemann for Telkom

Johannesburg, 10 Dec 2004

Telkom is to reduce its management headcount by 10%, or 250 positions, by March, in line with its policy of cutting costs.

According to Telkom`s group executive for human resource services, Oupa Magashula, because the company is technology-driven and the technology evolves so quickly, jobs inevitably become redundant.

"A characteristic of the new technology that we are introducing is that it requires fewer people, while Telkom is also suffering some erosion of business due to increased competition," he says.

"In the past five years, we have reduced our staff count by some 52%, but management level job cuts have only been in the region of 11%, so we are now balancing the scales."

He says 60% of the company`s operational expenditure (Opex) costs are staff expenses, and that Telkom aims to reduce this Opex to 57% next year.

"We are following the normal processes involved in job reductions, and are naturally sensitive to the impact that these will have on those affected by the job losses," says Magashula.

"These processes will follow the same route as those used for normal staff. Management has been informed that we need to reduce staff by some 250 positions, and the option is available for people to accept a voluntary severance package."

He says there is also the option of redeployment through the organisation`s Agency for Career Opportunities with full pay and benefits, while waiting to be redeployed or reskilled within Telkom or elsewhere in the ICT sector.

However, Magashula says at management level there is only a four-month period within the agency, as opposed to the 12 months for normal staff.

"Obviously, if we do not reach the target of 250 job cuts through voluntary severance or people seeking redeployment through the Career Agency, we will have to look at other criteria to determine who will have to be retrenched," he says.

"Criteria we will look at will include the principle of 'last in, first out` and job necessity, but once the decision has been made as to which jobs will be cut, Telkom will again offer those staff the option of the voluntary severance package.

"This is in line with Telkom`s policy of maintaining a sensitive approach to the touchy subject of job cuts," says Magashula.

Yesterday, Telkom announced it had altered its management structure, giving CEO Sizwe Nxasana a greater operational role at the group.

The telecommunications network operator said that because Nxasana would have more of an operational role, the number of executives reporting directly to him will be cut from 14 to 10.