‘Declining performances’ force Telkom to cut jobs
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