South Africa’s Labour Court is expected to deliver a ruling on Telkom's plan to cut as much as 20% of its workforce on March 4, as the company seeks to reduce costs to cope with a weaker local economy.
The Communication Workers’ Union approached the court, saying at a hearing on Wednesday that Telkom is rushing the process and hasn’t considered other alternatives to job cuts that could affect as many as 3,000 employees.
"Following the court hearing, the deadline for voluntary severance and early retirement packages has been extended to March 6," Telkom said in a statement.
The former monopoly started the consultation process with labor unions in January after a declining performance in its fixed-voice business, which previously made up more than half of gross revenue. Its fixed-data unit is also suffering because of a migration to mobile data, the Pretoria-based company said, adding that it is trying to achieve "organisational and operational efficiencies."
South Africa’s economy is stuck in its longest downward spiral since 1945 as President Cyril Ramaphosa struggles to push through reforms needed to spur growth. Power cuts, delays in policy implementation, deteriorating public finances and the threat of South Africa losing its sole-remaining investment-grade credit rating dragged business confidence down to the lowest level in 34 years in 2019.