Telecoms industry likely to haemorrhage more jobs

2015-02-09 07:00

More than 700 jobs were lost in the telecommunications industry in 2014 – and it appears 2015 will see more of the same.

Telkom, MTN and Cell C all shed staff last year as the highly competitive environment continues to eat away at jobs. Of the big guns, only Vodacom says it hasn’t retrenched any staff yet.

Telkom seems headed for the biggest cut – if its employees’ warnings to their unions of a “big retrenchment” in April come true.

CEO Sipho Maseko inherited an ailing fixed-line operation with an insignificant mobile operation that was bleeding money – he also faced a hefty staff bill. Soon after he took up the reins in 2013, there was a voluntary severance programme at Telkom in a bid to cut costs.

According to Telkom’s annual reports, the number of employees for the financial year to March 31 2013 was 21?209 and, by March 31 2014, this was down to 19?197.

This means 2?012 employees had left the fixed-line giant in just one year.

In October last year, a further 104 Telkom employees were handed retrenchment notices and 96 were not placed, thus losing their jobs.

This was after more than 300 Telkom SA managers left the company voluntarily during its restructuring process.

“We are in continuous discussions with Telkom,” said Marius Croucamp, spokesperson for union Solidarity.

“However, we’ve now got feedback from our members in Telkom that in the regional managers’ [division] they are already talking to people about a big retrenchment in April,” Croucamp said.

He said Solidarity would take the matter up with Telkom “because they are supposed to consult with us, even when they contemplate [retrenchments], and they are not doing that”.

Jacqui O’Sullivan, the spokesperson for Telkom, said although the company had wrapped up its retrenchments by the end of September 2014, the current market-related ratio of staff expenses to revenue for Telkom was still significantly below industry benchmarks.

“Some of our competitors have achieved more optimal staff expenses-to-revenue ratios. What is required is a more market-related ratio of staff expenses to revenue. Telkom’s target is to achieve a ratio of 25% in five years,” said O’Sullivan.

She added that it was “too soon” to put definitive time frames in place “as areas for potential review are still being studied”, but insisted there would be consultation.

Croucamp said his union was watching Cell C and Vodacom carefully.

“We’ll have to wait for the Vodacom-Neotel merger and see what comes out of that,” said Croucamp, referring to Vodacom’s R7?billion acquisition of fixed-line operator Neotel, which is currently before the regulator and competition authorities.

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