BCX staff have received an email from the company’s CEO Jonas Bogoshi informing them they have started a “section 189 process”.
A section 189 process refers to the retrenchment of staff due to operational requirements.
“Today, we have served the unions with Section 189 notice which invites the unions to attend the first CCMA facilitated consultation session meeting set for the 21st November 2018,” states the email, which MyBroadband has seen.
It stated that “many discussions and various considerations” for alternatives took place. However, strategies in place to mitigate declining voice revenues will “not substitute for the decline as the replacement technologies and new revenue streams are at lower margins”.
“The changes within our organisation must also be considered against what is happening in our environment. South Africa is in a technical recession. We are expecting that current and potential clients will continue to withhold IT spend in this economic environment,” states the email.
The Section 189 process is applicable to BCX employees only, it added.
In a separate document addressed to labour unions, which MyBroadband has seen, the retrenchment process is said to affect approximately 790 employees.
Telkom Group, BCX’s parent, confirmed that BCX has served the Section 189 notice on all registered unions that have union members at BCX.
“The process is facilitated by the CCMA and will start on 21 November, subject to CCMA availability,” said Telkom.
The notice to staff follows two significant sets of events at BCX and Telkom respectively in recent months.
At BCX, there has been an exodus of top executives this year.
In June, then-BCX CEO Ian Russell left the company to work more broadly within the industry. Russell was replaced by Bogoshi.
In August, BCX Chief Financial Officer Refilwe Nkabinde resigned, and was replaced by Zweli Vilakazi from the Telkom Group.
Also in August, BCX COO Mike Buttner resigned from his position. He “resigned for personal reasons”, said BCX.
At Telkom, the company announced in September it would start offering voluntary separation packages and voluntary early retirement packages to staff.
It stated at the time that the “cumulative effect of past regulations continues to impact our business operations”.