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Political party demands Cell C halt retrenchments

Read time 2min 10sec

Political party African Democratic Change (ADEC) has warned Cell C against planned retrenchments, threatening country-wide protests if the job cuts are not halted.

Cell C announced job cuts of up to 40% of its workforce in June, targeting junior management and semi-skilled staff, and has since been engaging with the unions on the matter. The unions are resisting the move to retrench.

The Information Communication Technology Union (ICTU), which represents 60% of staff, says the consultations initiated by Cell C are “grossly defective” and demanded the process be stalled.

The ongoing process at the telco follows a similar move in May, when some senior managers and executives were engaged by Cell C with the possibility of redundancy of certain positions and retrenchments.

Now, ADEC, which was formed in 2017, led by Visvin Reddy, is demanding Cell C CEO Douglas Craigie Stevenson and board chairman Joe Mthimunye suspend the retrenchments.

Reddy says the decision to retrench workers was “insensitive, unpatriotic, self-serving and profit-focused”.

He accused Cell C and other companies of using the COVID-19 pandemic as cover to cut jobs in order to increase profits.

“The party has demanded that all staff already retrenched be reinstated immediately,” Reddy says, warning that the party will carry out protests at Cell C premises across the country.

Cell C has confirmed it is aware of the ADEC demands.

The telco has under-performed and generated significant losses, and recently stated it incurred R33 billion in losses over the years.

The embattled mobile operator lost 2.9 million subscribers for the year ended December. Last year, it recorded a R4.2 billion loss and in 2018 losses were R7.3 billion.

However, a recapitalisation programme is on the cards to try rescue the business.

In May, the Competition Commission recommended conditional approval of the proposed acquisition of certain Cell C assets by special purpose vehicle Gatsby SPV, but the deal is yet to be concluded.

Blue Label Telecoms, the largest shareholder of Cell C, says the telco will be recapitalised this year as the key partners have made huge inroads in negotiating the funding deal.

In a recent media engagement, Brett Levy, Blue Label’s joint-CEO, said Cell C recap negotiations have been strenuous for the past year-and-a-half, but in the last two months, all parties to the proposed deal have been engaging, and conclusion of the transaction will happen before year-end.

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