Telkom to axe 3 000

THE Federation of Unions of South Africa (Fedusa) says Telkom has more retrenchments on the cards and will be axing 3 000 more employees from May, bringing planned job cuts to 6 000 at the partially State-owned company.
Fedusa and the South African Communications Union (Sacu) on Friday called on the government to axe Telkom’s entire board. The Information Communications and Technology Union (Ictu) also said the board should be disbanded.
“We unfortunately cannot comment on the views of other organisations,” Telkom said.
Telkom issued a formal notice of its intention to retrench 3 000 workers to organised labour last week.
The unions are fighting the planned retrenchments, charging the company with a failure of corporate governance.
Riefdah Ajam, Fedusa’s acting general secretary, said Telkom’s plans to outsource services would likely see a further 1 000 employees facing retrenchment in May, while about 2 000 could lose their jobs at Telkom’s IT subsidiary, Business Connexion (BCX), thereafter.
Ajam blamed the board for the alleged lack of strategic direction.
“Despite Telkom’s share price going down about R100 to R20, the chief executive and his executive management awarded themselves handsome bonuses at the end of last year. This is outright shameful and only affirms the analogy Fedusa emphasised in November 2019 that Telkom in fact holds the title of being the main architect of retrenchments in South Africa, considering the demise of the working-class employees from 69 000 to a meagre 10 000 currently,” she said.
Telkom has cited the weak economy and the declining performance of fixed voice, which previously made up more than half of Telkom’s gross revenue. Telkom’s net debt increased to more than R11,7 billion in the six months to September from R8,8 billion in March.
In the six months to September, Telkom declared an interim dividend of 71,5 cents a share, and said its mobile division had posted revenue growth of almost 57 percent.
Sacu organiser Keith Aimes said in addition to the first phase of the retrenchments involving 3 000 employees the Openserve and consumer divisions, further retrenchments were on the cards. Aimes said the second phase of the retrenchments would likely impact 800 employees in the corporate centre and 2 000 BCX employees would be retrenched later in the year.
Telkom acquired cloud-based service provider BCX for R2 billion in 2014.
“BCX has not made a profit since 2014,” said Aimes, questioning Telkom’s strategy. The current Telkom board should be dismissed with immediate effect and equally be declared delinquent for their contributory roles in failing to avert the possible demise of Telkom,” said Aimes.
— Business Report