South African telecommunications provider Telkom, will be making massive changes to its structure, as it aims to shed $100-million in costs per year for the next five years.
CEO Sipho Maseko has revealed that as part of this exercise, the company will shed staff. “It’s clear in my mind that Telkom will shed a bit of weight. We are way out of shape in so far as revenue to staff is concerned. We will have much more thorough conversations,” he told Business Day.
This is not the first time that Telkom has decided to cut jobs, as it previously planned to undergo forced retrenchments, but those plans were scuppered by fierce opposition from labor unions. As an alternative, it implemented voluntary and early retirement packages.
According to Farai Mapfinya from Mvunonala Asset Managers, Maseko’s proposal might be easier said than done. “While that may not be sufficient to rationalise Telkom’s head count due to some legacy issues, we think this move could still face fierce resistance and pushback from trade unions.”
According to the BusinessDay, “the company is in the process of implementing a multi-year turnaround strategy that has so far seen it transfer the management of its mobile network infrastructure to MTN, impair its legacy fixed-line network by R12bn, and sell loss-making internet service business iWayAfrica.”
Charlie Fripp – Consumer Tech editor