Telkom will consider employment equity in its latest round of planned job cuts, which could affect more than 2 600 management-level employees, a media report said on Wednesday.
This means that partially state-owned and JSE-listed telecommunications operator “plans to target white, male employees when making job cuts”, according to a report published by Bloomberg, which quotes trade unions as its source.
White males, the news agency says, make up about 40% of the senior and middle management positions Telkom wants to reduce.
Telkom is aggressively cutting costs as competition in South Africa’s telecoms industry intensifies.
In April, Business Day reported that Telkom intends slashing its costs by R1bn/year for the next five years in an effort to unlock shareholder value and turn around its financial performance.
This would include job cuts, CEO Sipho Maseko was quoted as saying.
The newspaper said that Telkom had given earlier guidance that it would reduce headcount by a third over five years, involving in the region of 7 000 jobs.
Telkom’s share price has rallied strongly in the past year on the hopes that Maseko will lead a turnaround in the troubled operator’s fortunes.
In June last year, just two months into his tenure, Maseko announced that Telkom would impair the carrying value of its fixed-line network by R12bn, reducing its net asset value from about R57/share to R34/share. Since, then, the share price has rallied significantly. It closed on Wednesday at R39,40/share after setting a new, multi-year high in intraday trading of R39,94/share.
In March, Telkom announced it had signed a heads of agreement with rival MTN in a move designed to de-risk the loss-making Telkom Mobile business, which was launched belatedly as South Africa’s fourth mobile network operator.
In in terms of the agreement, MTN will take over the financial and operational responsibility for the roll-out and operations of Telkom’s radio access network. In addition, the two firms’ customers will be able to roam on their respective networks. Talks between Telkom and MTN are ongoing and further details may be announced at the former’s annual results presentation in June. — (c) 2014 NewsCentral Media