Telkom must cut jobs to safeguard the company’s sustainability.
This is according to a statement from the Telkom Group, which said it has started a consultation process with organised labour as part of a section 189 process.
“Telkom approached the CCMA to facilitate the process,” it said.
“Rapid changes in technology remain a key challenge for the group. While Telkom has made the necessary investments in new technologies and revenue streams, particularly in the fast-growing mobile business, this has taken its toll on profitability.”
Telkom is planning to cut as many as 3,000 jobs across the company, according to reports from earlier this month.
The job cuts will reportedly happen in phases – with the first phase from January to April.
Telkom went on to state that besides the difficult macroeconomic environment “confronting all companies operating in South Africa”, Telkom must reposition itself amid fundamental changes within the telecommunications industry.
“At the same time, Telkom has seen a sharp decline in fixed-voice and interconnection revenues across the group as customers shift towards new technologies, such as fibre-to-the-home. This trend will continue,” said Telkom.
Telkom added that it has been “competing in a duopolistic mobile market” and the two biggest companies have “virtual control over voice and data prices”.
This is in reference to Vodacom and MTN’s superior performance in the open market.
“The group is optimistic that the Data Services Market Inquiry will yield firm regulatory action to stimulate competition in South Africa’s mobile market,” said Telkom.
“It is our hope that through considered and constructive engagement with the unions we can present and debate the challenges within our economy, industry, and Telkom.”