Telkom had 14 212 employees at the end of September 2015, down from 21 800 in March 2013. However, further reductions in head count, including through “residual outsourcing”, are on the cards as the operator seeks to reduce its employee expenses to revenue ratio further.
“We have made good progress,” CEO Sipho Maseko said in an interview with TechCentral this week. “Our guidance was to get to around 25% [of staff expenses to revenue], and I think we are getting closer to that number.”
The next phase, he said, will involve “residual outsourcing opportunities”. He declined to comment on what Telkom’s ideal staff complement might be.
“We are engaging with the trade unions so that we are absolutely aligned and the case for change is understood,” he said. “Where we are absolutely empathetic is making sure jobs are not lost, and that is why outsourcing becomes the right approach.”
Maseko likened the process of reducing employee costs to running a marathon. “We have done 30km or 35km and so we are much closer to the end that to the beginning. There are still one or two killer hills in front of us that we need to overcome, and then we are done.”
He said that in the final phase of employee headcount reductions, Telkom intends collaborating closely with the trade unions “so that their objectives are met to keep as many people in jobs as possible while our objectives are met of getting the same service at a lower unit cost and with better productivity”.
Speaking to analysts and media at the group’s interim results presentation on Monday, Maseko said Telkom is exploring a number of other options with the unions to get employee costs down. These include a possible wage freeze and the option of working a shorter week. “In the end, we will have choices,” he said.
Chief financial officer Deon Fredericks said Telkom isn’t going to take a hard line on outsourcing. “We are not going to outsource for the sake of outsourcing.”
Fredericks said that in the current tough economic environment, it makes sense for Telkom to try to optimise its cost base as far as possible.
Maseko added that where Telkom is not the “natural provider” of a service, and it can get it at a lower cost through outsourcing, it will consider doing so. — © 2015 NewsCentral Media