Trade union Solidarity has slammed Telkom for its “thoughtless approval” of voluntary severance packages (VSPs), which it says has led to a major skills shortage at the telecommunications giant.
According to a statement, 1 800 Telkom employees applied for the VSPs between 21 February and 18 March this year for retirement either at the end of March or April.
A total of 1 650 applications are said to have already been approved, of which 945 (57%) were voluntary early retirement packages for employees close to retirement.
According to Solidarity, 1 500 Telkom experts left in March, and the April figures are still unknown.
However, Telkom could this morning not respond to questions relating to the job cuts, saying: “Telkom is currently in a closed period that only ends on 13 June 2011, when the company announces its annual results. During this time, Telkom is not permitted to release the requested information.”
Execution phase
In November last year, it was reported that Telkom was mulling further possible voluntary retrenchments as it geared up to enter the “execution phase” of its turnaround strategy. By that time, Telkom had already voluntarily retrenched 186 managers.
For the first six months of last year, Telkom reported revenue down by 5.4%, while profit from continuing operations was down 9.3%. Then acting CEO Jeffery Hedberg commented at the time that the results painted a picture of an organisation under pressure.
Hedberg also said at the time that Telkom may look at more voluntary retrenchments if it found it was overstaffed in certain areas.
Solidarity claims Telkom has ignored the union's warnings regarding the skills crisis it believes the severance packages will create, as well as various complaints regarding the “discriminatory nature of the selection criteria”.
“This happened exactly one day after an agreement, which was reached in 2009 between various trade unions and Telkom, guaranteeing employees' job security until 31 March 2011, expired,” says Solidarity.
Employees under pressure
Solidarity spokesperson Marius Croucamp says it is clear that Telkom was in a rush to get rid of a large number of employees.
“One of the tactics which the company used was to offer a larger package for employees who ended their services earlier. Employees who retired on 31 March qualified for six months' salary, while employees who retired on 30 April, only qualified for four months' salary,” explains Croucamp.
The union also maintains that Telkom did not follow its own criteria when applications for VSPs were considered.
“One criterion which Telkom set in consideration for VSP applications was the preservation of skills, but it is clear that the company targeted especially older employees when the applications were approved,” says Solidarity.
“In more than 57% of the applications, which were approved, the employees were close to retirement and that is exactly where Telkom's wealth of skills is contained.
“Telkom now wants to transfer the skills of 945 employees, each with between 10 and 30 years' experience in the industry, to remaining Telkom employees who are already functioning under a lot more pressure,” says Croucamp.
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