Telkom has cut its workforce by 70% over the past decade

Over the past 10 years, Telkom has shrunk its workforce dramatically as the shift from fixed-line to mobile accelerated, with more than 70% of staff cut over the period.

In March 2014, it had 19 781 employees across the business – which at that point comprised Telkom, Trudon (its Yellow Pages subsidiary) and Swiftnet (its towers unit).

Fast-forward to March 2024, and it has just 5 845 staff in Telkom, fibre and networks subsidiary Openserve, and property unit Gyro. This excludes the 4 032 staff at subsidiary BCX as it only acquired the business in 2016 and is not included in the 2014 numbers.

Source: Company reports

Telkom share price in the past decade

Even at BCX, there have been sharp cuts – with total staff 32% lower than the nearly 6 000 people employed at the business at the end of March 2016. However, this excludes 1 200 Telkom Enterprise staff that were moved to BCX during 2016/17. Factor this in and BCX employee numbers are nearly 45% lower.

Telkom executed a massive voluntary severance and early retirement programme in 2015 and 2016. More than 4 400 jobs were cut as part of this exercise and the group booked a total charge of R2.8 billion across the two financial years.

This saw it ‘reset’ its base of Telkom staff from the 19 000 level to around 14 000 in early 2016 (excluding BCX).

These cuts coincided with the peak in the number of ADSL customers (just over one million in 2016).

Because of the acquisition of the ICT services provider, total staff across the group actually spiked to 20 000 in March 2016. The core Telkom business had 11 000 employees in March 2017, nearly 2 000 lower than the previous year (not including the 1 200 staff who were moved to BCX).

In 2018, it began separately disclosing the number of Openserve staff (8 500). This has been steadily declining since then and is just 4 500 today – a drop of 46%. A significant chunk of these cuts came in the 2023 financial year as part of its most recent restructuring process.

This saw another round of voluntary early retirement packages and voluntary severance packages to employees.

More than 1 700 employees were affected, with around 1 200 accepting it in the year (meaning R1 billion in costs in the period). Excluding BCX, Openserve was least affected, with a 20% cut in the number of staff (its Consumer unit saw a cut of 21% and the corporate centre 34%).

Openserve is now a legally and structurally separate entity within the group (this was done when it was still searching for a strategic equity partner in that business).

The decline in the number of Openserve staff is not surprising given that its fixed-line network has shrunk to just 609 000 lines from 3.6 million in 2014. It has 590 000 active fibre lines installed to homes, with more than 1.2 million homes passed. Contrast this with just 200 000 active lines in 2017.

Fibre networks require far fewer staff to install and manage when compared to legacy copper ones. These are generally stable and need less attention once commissioned, aside from cable breaks caused by repairs to water or electricity infrastructure.