Telkom in talks with 20% of workforce over cuts as economy wilts

Telkom joins Walmart in starting talks with labour unions.
Image: Bloomberg

Telkom SA is in talks with 3 000 of its employees over potential job cuts as the South African carrier contends with falling sales in its landline business and a weak local economy.

The former monopoly, which has more than 15 000 staff, started the consultation process with labour unions “to restructure our business for future competitiveness,” Pretoria-based Telkom said in an email. It is experiencing “declining performances in fixed voice, which previously made-up more than half of Telkom’s gross revenue; fixed data, due to migration to mobile data; and, organisational and operational efficiencies.”

South Africa’s economy is stuck in its longest downward spiral since 1945 as President Cyril Ramaphosa struggles to align different factions within the ruling party, obstructing reforms needed to spur growth. Power cuts, delays in policy implementation, deteriorating public finances and the threat of South Africa losing its sole-remaining investment-grade credit rating dragged business confidence down to the lowest level in 34 years in 2019.

Telkom joins Walmart in starting talks with labour unions. The US retailer’s Massmart plans to close stores in a move that could affect 1 440 of its employees. That is adding to a stubborn unemployment rate of 29.1% in Africa’s most industrialised economy.

Telkom’s adjusted earnings per share in the six months through September fell 36%, the company said in November, mainly because of accounting charges. Shares in Telkom gained as much as 8.1% on Thursday, paring losses over the past 12 months to about 45%.

© 2020 Bloomberg

Get access to Moneyweb's financial intelligence and support quality journalism for only
R63/month or R630/year.
Sign up here, cancel at any time.

COMMENTS   5

You must be signed in to comment.

SIGN IN SIGN UP

Telkom is moving away from copper lines. One wonders why? Could it be copper theft?
Soon Prasa will close down as well. Copper cable theft and burning trains. ‘They’ are slicing their own throats.

In North Africa and Middle East they have thriving copper networks. No copper theft, guess why? Shariah law has some merits.

Really? Where is the merit in something as primitive as stoning someone to death, and calling it “justice”? Sorry, no. Its just barbaric.

After the ANC became the major shareholder, Telkom became a “sleeping giant”, and very quickly turned that into a “dying dwarf”! Another ungovernable, unprofitable failure of the our beloved ANC! SUCCESS!

It will be interesting how the proposed downsizing of Telkom ,Eskom , massmart,, will progress considering Some are SOE’s and others are Public companies . Unions have a lot of clout in the tripartite alliance and can influence policy decisions, and one would think less influence with the public companies.

End of comments.

LATEST CURRENCIES  

USD / ZAR
GBP / ZAR
EUR / ZAR

Podcasts

NEWSLETTERS WEB APP SHOP PORTFOLIO TOOL TRENDING CPD HUB

Follow us:

Search Articles:Advanced Search
Click a Company: