Telkom could cut as many as 3,000 jobs

(Image sourced from MyBroadband)

Telkom has faced gloomy share-price performance on top of dwindling earnings in the last few months – leaving the South African network provider in big trouble. With very few options, it’s reported that the partially state-owned enterprise could be willing to cut up to 3,000 jobs – nearly 20% of its total workforce.

(Image sourced from MyBroadband)

According to My Broadband, “Telkom’s share price has been hammered over the last six months, declining from R99.50 on 11 June to under R30 per share on 9 January. Investors have lost confidence in the company because of the rapid decline in fixed-line customers, lower enterprise revenue, and increasing debt.”

“While Telkom CEO Sipho Maseko said the company will now focus on its mobile services, this strategy is also questionable. The company’s mobile unit is showing strong growth, but as it is such a capital-intensive business, Telkom is taking on a lot of debt to fund this growth.”

“With net debt of R12 billion, many investors feel that Telkom’s debt is reaching worrying levels and are questioning whether the company accurately assessed the finance charges related to this debt.”

Reuters reported that “Telkom is planning to cut up to 3,000 jobs in its wholesale division Openserve, consumer unit, as well as in its corporate centre”. The report suggests that these cuts will take place over the course of the year, with the first round of cuts to happen between January and April.

Telkom is not South Africa’s only network provider facing challenges, Cell C fell into some dangerous territory when debt, poor business performance and liquidity problems threatened to cripple the company in 2019. However, newly appointed CEO, Douglas Craigie Stevenson, has been taking steps to right-size the business, focusing on revenue-generating activities and cutting costs where necessary.

Edited by Jenna Delport

Follow Jenna Delport on Twitter

Follow IT News Africa on Twitter