Retrenchments: Telkom ‘states the facts’

The company has slammed “baseless” claims made by labour unions this week over its latest round of restructuring.


Telkom has slammed trade unions for spreading disinformation about restructuring at the telecommunications operator, dismissing as “baseless” claims made this week by Solidarity and the South African Communications Union (Sacu) about impending job losses.

Sacu has warned that Telkom could be planning to dismiss as many as 9 500 of Telkom’s nearly 20 000 workers within the next six months, while Solidarity has said the operator is targeting whites in its restructuring plans.

“Telkom would like to place on record the facts surrounding its restructuring process to dismiss the baseless allegations by labour unions regarding the process and criteria under consideration,” Telkom said in a statement on Tuesday evening.

“The company rejects allegations that race is being considered as the only criterion for the placement of employees in Telkom’s new structure,” it said. “The fact is that Telkom’s focus is on retaining the right skills for its turnaround strategy and will consider several criteria throughout its restructuring process.

“These criteria include qualifications and experience; the employee’s potential; the last-in, first-out principle when more than one employee qualifies for appointment into the same position; and employment equity. It is important to note that employment equity is only one of the four criteria applied to this process and that Telkom, as any South African company, is required in terms of the Employment Equity Act to comply accordingly,” it added.

Claims that Telkom will retrench 9 500 employees in the next six months are also unfounded, the company said in the statement.

“In fact, the entire management pool that Telkom seeks to reduce from in the consultative process currently underway, is made up of 2 650 managerial staff. The company is not targeting specific numbers of individuals; it aims to reduce the number of management layers and achieve an employee cost-to-revenue ratio of 25% over the next five years. Employee costs currently make up 30% of revenue.”

Telkom said the objective is to “bring leadership closer to customers by removing unnecessary layers of management, which will improve customer service and experience”.

“Alternatives, such as outsourcing and joint ventures, may also be explored as part of the business and organisational restructure in the future,” it said.

It added that the restructuring process is “an imperative for the survival of the business into the future and its success”.

In the statement, the company said it has “underperformed for several years as its share of market in fixed voice and data continues to decline and fixed-to-mobile substitution has intensified competition. The fixed voice market makes up more than half of Telkom’s revenues, and is in decline. The intention is to build the right organisation for the future by improving the business performance and unlocking efficiencies. The company will continue to explore other avenues that can assist with cost reduction in all areas of the business.”

It said that prior to and throughout the restructuring process, it has consulted with labour unions to ensure that the facts are consistently communicated to them.  — © 2014 NewsCentral Media

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