Telkom Agrees That 8.5% of Staff Can Exit on Voluntary Dealsby
Telkom SA SOC Ltd., the former South African phone monopoly cutting costs to counter a decline in its fixed-line business, has accepted 1,184 applications for voluntary redundancy, reducing its workforce by about 8.5 percent.
The operator, still 39 percent owned by the South African government, made the offer to staff after negotiations between the Pretoria-based company and unions to eliminate 6,000 jobs by July were unsuccessful. Telkom received 1,649 applications to exit the landline provider, according to a letter from Chief Executive Officer Sipho Maseko seen by Bloomberg.
“On my recent national roadshow with all our staff, I described these next few months as the last steep hill at the end of a long and hard marathon,” Maseko said in the note. “We have made so much progress and we all want to get to that finish line.”
Maseko has been trying to reduce the financial burden from the company’s older, well-paid workforce since taking the helm almost three years ago, while attempting to grow the mobile-data business. The company has a workforce of 14,000 in South Africa. That compares with about 7,800 employed by competitor Vodacom Group Ltd. across all its African operations.
Telkom shares gained 4 percent to 57.74 rand by the close in Johannesburg on Monday, paring their decline for the year to 10 percent. The company is valued at 30 billion rand ($2 billion)