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Telkom: “Restructuring is imperative for the survival of business”

February 16, 2015 • Mobile and Telecoms, Southern Africa, Top Stories

Telkom

Telkom: “Restructuring is imperative for the survival of business.”

South African telecom provider, Telkom SA has denied claims that the company has been planning to cut up to 55 percent of its initial 18,000 staff members. According union group Solidarity, it expected to receive a formal notice of the job cuts from Telkom on Monday, 16 February 2015.

Solidarity revealed that: “The company’s management informed the trade union that it is planning on restructuring its field force division,” union’s spokesman Marius Croucamp said. “As many as 10,000 employees could possibly be affected by the process.”

According to Reuters, Jacqui O’Sullivan, Telkom’s Managing Executive for Group Communication stated the following: “Telkom’s meeting with organised labour is still ongoing. The claims by Solidarity are incorrect.”

Telkom has also denied reports that it is considering the sale of mobile phone towers in South Africa.

Telkom has so far denied the report, and has issued the following statement:

Telkom has commenced with its next steps to unlock further cost efficiencies within four areas of the business, namely, certain Telkom’s Direct Stores, Call Centres, IT Legacy Systems and internal printing and Supply Chain and Properties.

When Telkom initially embarked on its turnaround strategy, the Company stated that it would look at alternatives, such as joint ventures, to ensure that job losses would be avoided and only used as a very final course of action. To this end, Telkom has completed a stringent procurement process and has identified external companies to undertake call centre operations, the management of IT legacy systems, a company to undertake the management of Telkom warehouses in the Supply Chain area of the business, as well as a company to take over internal printing activities.

A Section 197 process has been initiated for staff impacted in these areas of the business. These affected employees will be transferred to their new employers in the coming months.

Telkom is committed to a fair, objective and transparent process. The process will be consultative. A meeting with Organised Labour took place this morning. The official consultation process will begin on Friday this week, with more consultations to following over the coming weeks. Affected staff have also been informed.

Telkom has conducted detailed analyses of the viability of all the Telkom Direct Stores. The research has shown that it is, unfortunately, no longer viable to continue running some of the company’s 95 stores. It is clear that significant cost efficiencies can be realised, by closing down these unviable stores.

These affected employees have today been notified of the decision and, in terms of the Labour Relations Act, have been issued with Section 189 Notices. Telkom will explore every option to place the affected employees impacted by this process in other areas of the business. Should such attempts be unsuccessful, some of the affected employees may unfortunately be retrenched.

Telkom’s restructuring process is an imperative for the survival of the business and to secure the long term and sustainable growth of the company. The intention is to build the right organisation for the future by improving the business performance and unlocking efficiencies.

Telkom maintains its commitment to conduct this difficult process with respect to both the letter and the spirit of South Africa’s labour laws.

Earlier today, during Telkom’s meeting with Organised Labour, Solidarity issued a statement claiming Telkom will be restructuring the “Field Force” impacting up to 10 000 people. This is not a correct reflection of the day’s discussions. Today’s meeting, which will be followed with the initiation of the formal consultation process, pertains only to the call centre, IT legacy systems, supply chain warehousing and the affected Telkom stores. The Telkom Field Force is currently not part of the discussions with Organised Labour.

Darryl Linington

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