The Federation of Unions of South Africa (FEDUSA) has highlighted that overall job cuts at Telkom in 2020 could be around 6,000 – a large portion of the company’s 15,197 employees, and nearly double what was originally indicated by Telkom.
Telkom started its consultation process with organised labour today as part of the section 189 process which will see the company retrench thousands of workers.
The company initially indicated that it was planning to retrench 3,000 employees as part of a process which will take place in two phases.
FEDUSA, however, highlighted that 3,000 Telkom employees are set to be retrenched in the first phase alone.
It said another 1,000 Telkom employees face retrenchments in May 2020 while an estimated 2,000 staff members could lose their jobs at Telkom subsidiary BCX shortly after that.
Telkom has now confirmed that it plans to cut 3,000 staff as part of the first phase, and that the number of staff cuts as part of the second phase has not been determined.
Telkom blaming changes in technology
Telkom said the retrenchments are partly a result of investments in new technologies and revenue streams, particularly in its mobile business, which have taken their toll on profitability.
It also blamed difficult economic conditions and having to reposition itself amid fundamental changes within the telecommunications industry.
“Telkom has also seen a sharp decline in fixed-voice and interconnection revenues as customers shift towards new technologies, such as fibre to the home. This trend will continue,” it said.
Telkom spokesperson Noma Faku further complained that telecoms regulation in South Africa “was set up to disadvantage Telkom and advantage mobile operators”.
Faku added that the planned staff cuts at Telkom are necessary to ensure the sustainability of the business going forward.
Unions slating Telkom board and CEO
Unions are not convinced by Telkom’s arguments, and place the blame at the feet of the company’s board and senior management.
FEDUSA said Telkom has proven its lack of strategic direction, operational efficiency and technological innovation.
It said Telkom used to be a leader in telecoms infrastructure and market share, but relinquished this lead through decisions like halting its investment in fibre.
Communications Workers Union (CWU) Secretary-General Aubrey Tshabalala concurred, saying Telkom CEO Sipho Maseko and former chairperson Jabu Mabuza’s corporate plan failed.
Solidarity has requested a moratorium on Telkom retrenchments, arguing that they threaten the company’s financial sustainability.
It requested an aggressive retraining programme to be implemented to equip workers with new skills to help Telkom grow in a fast-changing environment.