‘De­clin­ing per­for­mances’ force Telkom to cut jobs

The Citizen (KZN) - - Business -

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

The for­mer mo­nop­oly, which has more than 15 000 mem­bers of staff, started the con­sul­ta­tion process with unions “to re­struc­ture our busi­ness for fu­ture com­pet­i­tive­ness”, it said in an e-mail.

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”.

SA’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 SA 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 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% yes­ter­day, par­ing losses over the past 12 months to about 45%. – Bloomberg

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