Telkom to cut thousands of jobs

Admire Moyo
By Admire Moyo, ITWeb's news editor.
Johannesburg, 16 Jan 2020

Telecommunications giant Telkom is reportedly set to cut up to 3 000 jobs.

This comes as further bad news for the already-strained South African job market after retail giant Massmart this week also said it will cut over 1 400 jobs at its DionWired and Masscash stores.

According to Reuters, a Telkom spokesman said on Wednesday: “Out of respect for our employees, we will share information once we have engaged further with our employees and unions.”

Telkom has been facing challenges with declining revenues in fixed voice and fixed data services over the years.

The affected jobs include support employees, specialist and operational employees, and supervisory and management levels in its wholesale division Openserve, the consumer unit as well as in its corporate centre, says Reuters.

“The deterioration in the economic climate, increased operational, regulatory and competitive constraints, coupled with continuing rapid migration from fixed voice and data business, have all had a major ongoing negative operational and financial impact on Telkom,” says the telco in a letter sent to unions.

“For Telkom to survive the current and anticipated tough trading conditions, it is imperative to seek and implement measures which will drastically reduce costs, eliminate inefficiencies and improve operational and financial performance in the interest of securing its continued commercial viability and employment for the majority of the employees,” it adds.

In its integrated report last year, the company said the decline in voice revenue was caused by migrating customers from legacy to next-generation technologies, and lower call termination rates.

Although Telkom delivered a strong set of financial results, buoyed by its mobile segment for the six months ended 30 September, it said profitability was affected by deep investments in future growth.

Job cuts at Telkom are nothing new, as the group has been offering voluntary retrenchment packages since 2015 in a bid to reduce its wage bill.

In May last year, Telkom said it cut over 2 000 jobs in 2018 and reduced permanent staff by 12.5%.

Telkom’s total permanent group workforce at the end of March 2019 was 15 296, compared to 17 472 at the end of March 2018, which was a reduction of 2 176 jobs in one year.

Telkom's staff count in 2013 was 21 209 and by 2015 was 18 333, while it was down to 15 296 last year.