By Zuko Komisa
Telkom announces retrenchments that will affect 15% of staff.
Telkom claims to have started a formal retrenchment procedure in accordance with section 189 of the Labour Relations Act.
As it tries to restructure certain of its activities, the group has stated that it would start cost-cutting initiatives.
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They have also blamed advancing technology and load shedding for retrenchment, claiming that the challenging trading environment in South Africa is part of the cause of this.
“The impact of ongoing load shedding for the quarter and the increased mobile network footprint resulted in a higher cost base for the Group.
This, coupled with the required investment in working capital to optimise the Mobile subscriber base mix, negatively impacted Telkom’s profitability for the current financial year to date,”
“The working capital investment in Mobile handsets and post-paid cost of sales are immediate costs, with corresponding revenues recognised over 24 to 36 months, and thereby do not immediately offset the upfront costs associated with growing our post-paid subscriber base. This, in turn, has also put pressure on margins and cash generation in the short term.” said Telkom,
The group described it as a “restructuring,” and it claimed that 15% of its workers would be impacted.
At the group’s half-year in 2023, there were 11,788 workers, putting 1,770 jobs in jeopardy.
