Telkom's massive job cuts bill - TechCentral

Telkom’s massive job cuts bill

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Telkom has paid out R1,1bn in voluntary early retirement and severance packages, according to the company’s quarterly report.

On Friday, the company released an operational update for the quarter ended 30 June 2015. The operational update was released on the same day that more than 2 000 Telkom employees accepted voluntary retirement and severance packages as part of the company’s turnaround plan.

In June, Telkom announced that it planned to cut 4 400 jobs through voluntary severance packages or voluntary early retirement packages, while also outsourcing 3 400 employees.

The company’s mass job cut plans, though, have been temporarily dealt a blow after the Johannesburg labour court ruled that Telkom had to suspend a section 189 notice — which deals with retrenchments — and consult further with unions before reissuing the notice.

“The first quarter has seen a delay in our planned restructuring initiatives following a court order to halt our section 189 process,” said Telkom in its operational update on Friday.

“We have subsequently offered voluntary severance and retirement packages and to date have approved 2 399 voluntary severance and retirement packages at a cost of approximately R1,1bn.

“On 31 July 2015, 2 136 of these employees will exit the business, with delayed exit dates for the remainder of the employees,” said the company.

Apart from cutting jobs, Telkom has also entered into other cost curtailment drives.

“The exit from our Pretoria head office, and subsequent relocation to our Centurion campus, has been completed and is expected to reduce utility cost, depreciation and finance charges,” the company said. “We are in the process of negotiating an exit from our lease liability,” added Telkom.

Trade unions such as Solidarity have opposed Telkom’s job cut plans and criticised the company for turning its back on agreements made in 2008 regarding a restructuring forum and memorandum of understanding agreed upon between unions and Telkom.

Regarding the exit of over 2 000 staff at Telkom, Solidarity also issued a statement highlighting its concerns.

“Given the volatile climate within Telkom, we anticipated that a significant number of employees would prefer to leave the company,” said Marius Croucamp, who is the head of Solidarity’s communications industry.

“Nonetheless, we remain highly concerned about the exodus of skilled Telkom workers and how this will affect the company’s future endeavours and delivery of services,” Croucamp said.

Union membership within Telkom has been growing. According to Telkom’s integrated report for 2015, 76,9% of the company’s employees belonged to “bargaining units”. This is a 1,8 percentage point increase on the 2014 financial year when 75,5% of employees belonged to unions.

The Communication Workers Union has the bulk of members in Telkom (40,3%) while the South African Communications Union and Solidarity have 20,2% and 16,4% respectively.  — Fin24

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