ICT Africa Headline News

Telkom Clarifies Restructuring Process

09 July, 2014

Source: Sanews.gov.za

Pretoria — Telkom has moved to clarify allegations by labour unions around the restructuring process at the telecommunications operator.

"Telkom would like to place on record the facts surrounding its restructuring process to dismiss the baseless allegations by labour unions regarding the process and criteria under consideration.

"The company rejects allegations that race is being considered as the only criteria for the placement of employees in Telkom's new structure," said Telkom on Tuesday.

According to media reports, the South African Communications Unions (Sacu) said that the operator could be planning to dismiss 9 500 workers, while Solidarity has said that the company is targeting whites in its restructuring plans.

"The fact is that Telkom's focus is on retaining the right skills for its turnaround strategy and will consider several criteria throughout its restructuring process," said the operator in Tuesday.

It further said that prior to and throughout the restructuring process, it has consulted all stakeholders, including representative labour unions, to ensure that facts are communicated.

In addition, it stated that the allegation that it will target 9 500 workers was unfounded.

"The fact is that Telkom's focus is on retaining the right skills for its turnaround strategy and will consider several criteria throughout its restructuring process."

Qualifications and experience, the employees' potential, the last in-first out principle when more than one employee qualified for appointment into the same position and employment equity form part of the criteria that the company looks at.

"It is important to note that employment equity is only one of the four criteria applied to this process and that Telkom, as any South African company, is required in terms of the Employment Equity Act to comply accordingly."

Telkom said the entire management pool, which it seeks to reduce from the consultative process currently underway, is made up of 2 650 managerial staff.

The company is not targeting specific numbers of individuals and is aiming to reduce the number of management layers and achieve employee cost: revenue ratio of 25% over the next five years.

"Employee costs currently make up 30% of revenue," it added.

The objective is to bring leadership closer to customers by removing unnecessary layers of management, which will improve customer service and experience.

Alternatives such as outsourcing and joint ventures may also be explored as part of the business and organisational restructure in the future, said Telkom.

The restructuring process was seen as an imperative for the survival of the business into the future and its success.

Telkom has underperformed for several years, as its share of market in fixed voice and data continues to decline and fixed-to-mobile substitution has intensified competition.

The fixed voice market makes up more than half of Telkom's revenues, and is in decline. - SAnews.gov.za

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