Telkom cagey on management shuffle

By Candice Jones for Telkom

Johannesburg, 03 Feb 2009

Telkom has confirmed it is reviewing its organisational structure. However, it has denied insider claims of management lay-offs.

This follows an internal e-mail circulated to staff, which has apparently caused concern among some staff members. The memo allegedly details Telkom's future staffing strategy.

The telecoms behemoth says it is gearing towards streamlining its efficiency in an increasingly competitive local arena. “Telkom is in the process of appraising and reviewing its organisational structure to ensure it is geared towards executing the strategy of the company,” Telkom explained in a statement this morning.

According to the statement, the strategy includes its focused expansion into Africa, combating increasing competition, as well as aligning with changes in the regulatory landscape.

A source revealed to ITWeb that part of the process would include the retrenchment or pink-slipping of certain top-level management. However, Telkom has denied this. “No employee has - to date - been affected by these processes and, consequently, no retrenchments or dismissals have occurred.”

The company seems to have also assured the unions that no retrenchments will take place under the new restructuring process. According to Telkom, the company aims to begin full implementation of the restructuring from the second quarter of this year.

“The process is being conducted in close consultation with Telkom's board, management, staff and organised labour,” explained this morning's statement.

The company did not say exactly what the restructuring would entail; however, the unions have indicated the process would only involve the top management levels.

United front

According to Communications Workers Union (CWU) spokesman, Gallant Roberts, Telkom had a high-level meeting with the unions to announce the restructuring. However, the union is also not entirely clear on the details.

According to Roberts, the CWU has an agreement with the telecoms company that ensures it is notified and consulted on any restructuring that will affect its members. However, none of the management staff affected by the proposed restructuring are current members of the union.

Similarly, the South African Communications Union (Sacu) was also notified of the management shuffle. According to its spokesman, Karriem Abrahams, it too will not be affected. He notes that Sacu has been assured by Telkom CEO Reuben September that the process will not involve retrenchments.

Still outsourcing

The management restructure follows a failed attempt by Telkom to streamline its operations through its controversial “capability management scheme”, which was summarily halted by protests by the unions.

According to Abrahams, the scheme, which will allow Telkom to effectively outsource 90% of its operations, is due to begin again in May. “We have not had a meeting on this with Telkom yet.”

Telkom already had bidders lined up to participate in the project last year, which included requests for proposals (RFPs) from Ericsson, Nokia Siemens Networks, Alcatel-Lucent and Cisco Systems for networks; and Accenture, Unisys, TechMahindra, HP and Amdocs for IT operations.

At the time, a high-level source at Telkom indicated the entire RFP process was a “smokescreen”, as Telkom has already chosen its preferred bidders. However, the company vehemently denied this.

The outsourcing tenders are speculated to be worth between R5 billion and R10 billion each, although Telkom says no value has yet been set. The fixed-line giant says the process that will quantify the value has only just started and will only show a clear financial figure after it is complete.