Vumatel shock – Unexpected staff cuts

MyBroadband has learned that many Vumatel employees are being retrenched without prior warning from the company that it was planning to cut staff.

According to one source, multiple Vumatel employees were shocked to learn that they are being retrenched – as they have been told the company is doing well financially.

Staff were reportedly informed that Vumatel’s recent sale to Remgro’s Community Investment Ventures Holdings (CIVH) will lead to more money being pumped into new projects.

Vumatel employees were even told that the acquisition may result in higher salaries and a better future for the company.

Affected staff complained that they were completely blindsided by the retrenchments, as there was no communication from Vumatel’s management about the staff cuts beforehand.

It is understood that a large number of project managers and assistant project managers were among those who were retrenched.

CIVH investment

Following these unexpected retrenchments, there are concerns that CIVH’s investment in Vumatel is putting financial pressure on the fibre network operator, which led to the staff cuts.

The Competition Tribunal of South Africa approved the acquisition of Vumatel by the Remgro-owned CIVH at the end of April.

These staff retrenchments therefore come only four months after the transaction received approval.

While the Competition Tribunal of South Africa approved the acquisition with conditions, these conditions do not seem to have included a freeze on retrenchments.

The concerns that Remgro/CIVH’s involvement in Vumatel has resulted in the staff cuts are therefore understandable.

Vumatel explains

Vumatel sidestepped questions about staff cuts at the company and would not comment on whether they are related to its Remgro/CIVH acquisition.

Instead the company said it has, over the last few months, looked at ways to create opportunities to drive local employment in the communities where it is rolling out fibre infrastructure.

“This move to what we call a turnkey approach enables us to partner with the vendors and contractors in-region and in so doing, create a broader, more skilled ecosystem,” Vumatel said.

It added that this model has allowed it to streamline the business, to build faster, and has been instrumental in its success in Cape Town and Johannesburg.

The move to streamline the business has resulted in direct staff reductions. The company, however, said it created employment in the communities that it works in.

Vumatel also dismissed speculation that it may cut infrastructure spending after its Remgro/CIVH acquisition.

“If anything, we are committed to more infrastructure investment as we aim to reach over one million homes in the near future,” Vumatel said.

Now read: Competition Tribunal approves CIVH’s acquisition of Vumatel

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Vumatel shock – Unexpected staff cuts