Telkom Cuts Almost 2,400 Jobs in Push to Reduce Staff Costs

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Telkom SA SOC Ltd., the South African landline operator that’s fighting unions over a plan to cut jobs, said it’s agreed to 2,399 voluntary severance packages as it seeks to better compete with mobile-phone companies.

“Many of that number will complete their service to Telkom today while some have deferred departure dates,” spokeswoman Jacqui O’Sullivan said in an e-mailed response to questions on Friday. “The packages were accepted by employees from across the company.”

Telkom, about 40 percent owned by the South African government, plans to reduce its staff cost-to-revenue ratio to 25 percent within three years from 29 percent, O’Sullivan said. The phone operator is reducing spending as sales from landlines fall amid soaring use of smartphones. Telkom has South Africa’s fourth-biggest mobile-phone service, lagging behind Vodacom Group Ltd., MTN Group Ltd. and Cell C Pty Ltd.

Telkom shares increased 7.9 percent to 61.48 rand at the close in Johannesburg, valuing the company at 32 billion rand ($2.6 billion). That pared the year’s decline to 12 percent.

The company’s net revenue gained 1.7 percent to about 6.5 billion rand in the three months through June, Chief Executive Officer Sipho Maseko said in a separate statement. Capital expenditure gained 15 percent to 730 million rand due to spending on mobile networks and faster Internet connections.

Skilled Exodus

“We remain highly concerned about the exodus of skilled Telkom workers and how this will affect the company’s future endeavors and delivery of services,” Marius Croucamp, a spokesman for Pretoria-based union Solidarity, said in an e-mailed statement on Thursday.

Maseko e-mailed staff about the departures on Thursday, according to O’Sullivan.

“Many employees who are about to leave Telkom have inquired whether we can assist them in finding alternative employment,” Maseko said in the e-mail that O’Sullivan forwarded. “Pursuing a new career is a personal journey, and Telkom is not in a position to provide advice on employment options,” he said, adding that staff could visit Telkom’s enterprise and development website, which considers funding for innovative ideas.

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