Telkom may retrench 15% of its workforce in latest round

SA’s third-biggest mobile operator Telkom said on Tuesday it would begin workplace consultations on internal restructuring that is expected to affect 15% of its workforce.

“As the group manages the delicate migration of revenue between old to new technologies, it is challenged with managing the costs associated with the different technologies, the competitiveness and sustainability of the group,” it said in a brief statement.

The Section 189(a) process will impact all business units and subsidiaries and is intended to ensure the sustainability of the group, it said.

Section 189 of the Labour Relations Act allows an employer which is considering large-scale dismissals to undergo a consultative process to determine whether such dismissals are deemed necessary to keep its operations going.

Telkom, valued at about R20 billion on the JSE, has been battling for years with a steady decline in its legacy fixed-line business, with fixed voice revenue declining almost double digits in its 2022 year, resulting in group revenue falling slightly. The company has been pushing into mobile services, and migrating from traditional copper to fibre.

Telkom employed just under 12 000 people as of the end of its 2022 year, which is down from just over 15 000 in its 2020 year, and over 18 000 in 2018. The company didn’t incur restructuring costs in 2022, but moves to reduce its workforce, including through voluntary severance packages, cost it R270 million in 2021. –