BL Premium reports that Telkom launched a frenzied scramble for cash on Tuesday, unveiling plans to slash as many as 1,770 jobs and to sell its device credit book.
This as rolling power cuts and heavy spending on the mobile network jacked up costs and eroded its profitability. The cuts would amount to 15% of the company’s nearly 11,800 workforce across all divisions, including IT unit Business Connexion, its mobile division, and its property and fibre subsidiaries. The retrenchment process “is intended to ensure the sustainability of the group”, Telkom said, adding that it would also sell its device loan book to an unspecified financial institution to raise R1bn. The frantic plan to manage the cash crunch at SA’s third-largest mobile phone operator comes as its earnings reports in recent months painted a picture of a company that seemed to have reached the ceiling in substantially winning market share in the mobile phone market. It also underscores the impact of power outages on companies with limited cash buffers as they have to increasingly rely on expensive backup power to keep their operations running during blackouts. The company, which warned that core profit fell almost 14% in the year to end-December, has also been hit by rising living costs, which have lowered demand for some products. Telkom said job cuts – likely to hit a nerve with its biggest shareholder, the government – were crucial in helping it to navigate its transformation from a fixed-line operator to a modern telecom operator.
- Read the full original of the report in the above regard by Mudiwa Gavaza at BusinessLive (subscriber access only)
- Read too, Telkom may retrench 15% of its workforce in latest round, at Fin24
Get other news reports at the SA Labour News home page