Trade Union Solidarity says it has dispatched a letter to Telkom demanding a moratorium be placed on what it called “forced retrenchments” which could potentially see thousands of jobs culled at the telecoms firm.
The moves comes after the government, Telkom’s largest shareholder, called for an urgent meeting to discuss the company’s plan to cut up to 3,000 of its more than 15,000 workforce.
Communications & Digital Technologies Minister, Stella Ndabeni-Abrahams, said she had “noted with concern the latest reports on the planned Telkom retrenchments,” and is seeking an urgent meeting with the firm.
Telkom issued a Section 189 notice to start the process of consultation to restructure its business, citing a need to gear the company for future competitiveness.
The announcement comes just days after retailer Massmart Holdings, majority owned by US retail giant Walmart, said it could cut up to 1,440 jobs under a plan to shut some stores, saying it’s struggling to grow sales in a tough economy.
The affected jobs at Telkom include support employees, specialist, operational employees and supervisory and management levels in its wholesale division Openserve, the consumer unit, as well as in its corporate centre.
Solidarity CEO Dirk Hermann said in the statement that there was no evidence that cutting thousands of jobs could secure Telkom’s financial stability and that rather, the evidence pointed to such a move potentially having the opposite effect.
“A company cannot pay its executive team more than R100m and then get rid of 3 000 of its workforce. That is reckless and, given the labour market retrenched workers have to face, it is merciless. In the previous financial year Telkom’s CEO, Sipho Maseko, alone took home a full R23m,” said Hermann.
“When a company fails to train its workforce for new challenges, it should not retrench the workers; it should get rid of the top management,” Hermann added.
Telkom spokesperson Mooketsi Mocumi said the company would only have clarity on the final numbers once the consultation process with unions was complete, Fin24 reported.
In a letter to unions, Telkom said it is also grappling with “organisational and operational inefficiencies” linked to fixed voice and data services, which require more staff to install, maintain and market.
Mocumi said Telkom also experienced steep decline performances in the fixed voice business which previously made up more than half of it’s gross revenue.
He added that Telkom’s fixed data also took a knock due to migration to mobile data.
The telecom provider, in which the government holds a stake of about 40%, said it will consider voluntary severance and early retirement packages for employees affected by phase one of the job cut, which will affect employees at Openserve and the Consumer divisions from January to April.