Less than a week after the labour court ordered Telkom to suspend a section 189 retrenchment process, the company has decided to abandon that approach and has opted instead to offer voluntary severance and early retirement packages to all non-unionised full-time employees.
At the same time, the company will implement a range of other cost-cutting measures, including a wage freeze that will apply to all employees, including management.
Telkom CEO Sipho Maseko said at a media briefing on Monday that restructuring Telkom and reducing its cost base is urgent given the severe financial pressures the business is under.
The voluntary packages will be offered until 27 July, with Telkom intending to offer them to unionised staff in the coming days. About 60% of Telkom’s workforce is unionised. The three recognised trade unions are Solidarity, the South African Communications Union and the Communication Workers Union.
“Telkom will seek consent of unions to extend the offer to unions as well,” Maseko said. He warned that the voluntary packages are entirely at the discretion of management. Also, the “generous” nature of the packages “may never be offered again” as the financial pressures the company is under become more severe.
Telkom’s restructuring process in recent years “has already delivered some benefits, but those are simply not enough”, Maseko said. “The very survival of Telkom is at stake.”
Telkom’s previous forced retrenchment plan, which was scuppered by the labour court, had mainly targeted the company’s networks and field services area. The new voluntary severance plan has been extended to the entire organisation.
The plan is to strip out at least R1bn/year in costs.
“The worst thing I can do is tell the employees of Telkom everything is fine. It is important we are very transparent with them about the true financial state of the company.”
Apart from the voluntary severance process and the planned wage freeze, Maseko said Telkom is also considering introducing flexi-time for workers, ways of improving staff productivity, upgrading the skills of employees, reducing the number of hours worked and possible further outsourcing. — © 2015 NewsCentral Media