Trade union Solidarity and the South African Communications Union (Sacu) launched a campaign against Telkom, accusing the group of attempting to carry out large-scale retrenchments where race was to be used as a criteria. Furthermore, Solidarity stated that it has already submitted documentation to the Labour Court to put a stop to Telkom’s alleged race-based retrenchments.
According to Businesstech, the trade union apparently wanted to mobilise as many South Africans and, in particular, Telkom clients to send thousands of petition letters to the CEO of Telkom, Sipho Maseko, in order to have this unacceptable criterion for retrenchment withdrawn.
The retrenchments would see as many as 9500 Telkom employees set to be affected by Telkom’s alleged retrenchment plans. In response to this, Telkom has released a statement in order to attempt to clear the air. The statement is as follows:
“Telkom would like to place on record the facts surrounding its restructuring process to dismiss the baseless allegations by labour unions regarding the process and criteria under consideration.”
“Prior to and throughout the restructuring process, Telkom has consulted with all stakeholders including representative labour unions to ensure that the facts are consistently communicated.”
“The company rejects allegations that race is being considered as the only criteria for the placement of employees in Telkom’s new structure. The fact is that Telkom’s focus is on retaining the right skills for its turnaround strategy and will consider several criteria throughout its restructuring process.”
The company added that, “These criteria include qualifications and experience; the employee’s potential; the last in, first out principle when more than one employee qualifies for appointment into the same position and employment equity. It is important to note that employment equity is only one of the four criteria applied to this process and that Telkom, as any South African company, is required in terms of the Employment Equity Act to comply accordingly.”
According to Telkom, “Allegations that Telkom will target 9500 employees in the next six months are also unfounded. In fact, the entire management pool that Telkom seeks to reduce from, in the consultative process currently underway, is made up of 2 650 managerial staff. The company is not targeting specific numbers of individuals; it aims to reduce the number of management layers and achieve an employee cost : revenue ratio of 25% over the next 5 years. Employee costs currently make up 30% of revenue.”
“The objective is to bring leadership closer to customers by removing unnecessary layers of management, which will improve customer service and experience. Alternatives such as outsourcing and joint ventures may also be explored as part of the business and organisational restructure in the future.”
“Telkom undertook a thorough review and investigation of all options before deciding to issue a Section 189 notice these include offering voluntary separation and early retirement options, expanding and diversifying revenue base, reducing costs and divesting from non-performing investments.”
“This restructuring process is an imperative for the survival of the business into the future and its success. Telkom has underperformed for several years as its share of market in fixed voice and data continues to decline and fixed to mobile substitution has intensified competition. The fixed voice market makes up more than half of Telkom’s revenues, and is in decline.”
“The intention is to build the right organisation for the future by improving the business performance and unlocking efficiencies. The company will continue to explore other avenues that can assist with cost reduction in all areas of the business,” concluded Telkom.