Telkom puts retrenchments on hold

Johannesburg - Local telecommunications firm Telkom says it won't implement retrenchments for the next two years, after the company had cut almost 4 000 jobs during the last financial year.

The latest announcement on retrenchments comes after Telkom said on Monday that its 'turnaround' process is now complete. 

Telkom on Monday reported its full year results which revealed that the company took an after tax profit hit of 25.4% following its application of severance packages.

The telco, though, said that its earnings before interest, tax and amortisation (Ebita) was up by 16.1% and reported an Ebitda margin of 29.3%. Operational revenue increased 13.9% to R37.3bn. The company's share price also soared about 10% on Monday amid news of the company's job cuts.

Amid Telkom's job cuts drive over the last three years, the company came up against opposition from unions such as Solidarity and the Communications Workers Union (CWU).

Telkom today has around 12 500 staff compared to the over 20 000 employees it had three years ago, said Ian Russell, chief administrations officer for Telkom at a media briefing in Johannesburg.

But all these parties came to an agreement over job cuts and outsourcing at the company. 

"There are no forced retrenchments within Telkom for the next two years," said Russell.

"We will limit any further outsourcing of people over the next three years," added Russell.

Outsourcing will further be limited to less than 1 000 employees over the next two years, added Russell.

Furthermore, Telkom is offering employees the opportunity to earn up to 12% more each month if they meet and exceed sales and customer service targets.

"We are talking about changing the remenuration profile to one that is more focused on customer satisfation," said Russell.

Telkom plans to put R700m towards this remuneration programme, which is dubbed 'Performance Pays'. The programme promises to give employees, who meet their targets, 6% more pay than last year.

The company also said that it will provide a 6% salary increase from April 1, 2017,

"We really are at the end of the difficult, large scale people reduction scale," said Telkom chief executive officer Sipho Maseko.

"The last three years have been very difficult especially dealing with issues of a people nature," added Maseko.

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