Telkom has announced plans to restructure its business, outsourcing noncore operations, rationalising its IT systems and closing retail stores, among other cost-saving moves.
The company has promised to keep job losses to a minimum and has denied a claim by labour union Solidarity, made earlier on Monday, that job cuts are planned in its field service (maintenance) division.
It hopes to improve cost efficiencies within its Telkom Direct Stores, in its call centres and in respect of its legacy IT systems. It’s also hoping to derive efficiencies by outsourcing its internal printing (including telephone directories), making improvements to supply chain managment and its reducing its vast property portfolio (it has already announced plans to relocate from its head office in downtown Pretoria to its campus in Centurion).
“When Telkom initially embarked on its turnaround strategy, the company stated that it would look at alternatives, such as joint ventures, to ensure that job losses would be avoided and only used as a very final course of action,” Telkom said.
“To this end, Telkom has completed a stringent procurement process and has identified external companies to undertake call centre operations, the management of IT legacy systems, a company to undertake the management of Telkom warehouses in the supply chain area of the business, as well as a company to take over internal printing activities.”
It isn’t naming which companies it has contracted or disclosing the value of the deals.
A section 197 process has been initiated for staff impacted in these areas of the business, it said.
Affected employees will be transferred to their new employers in the coming months.
“A meeting with organised labour took place this morning,” Telkom said. “The official consultation process will begin on Friday this week, with more consultations to following over the coming weeks.”
On its retail stores, Telkom said it has conducted detailed analyses of their viability.
“The research has shown that it is, unfortunately, no longer viable to continue running some of the company’s 95 stores. It is clear that significant cost efficiencies can be realised, by closing down these unviable stores.”
Employees working in these stores have been issued with retrenchment notices, but Telkom said it will “explore every option to place the affected employees impacted by this process in other areas of the business”.
Should such attempts be unsuccessful, some of the affected employees may unfortunately be retrenched.
“Telkom’s restructuring process is an imperative for the survival of the business and to secure the long term and sustainable growth of the company,” it said. “The intention is to build the right organisation for the future by improving the business performance and unlocking efficiencies.” — (c) 2015 NewsCentral Media