BL Premium reports that Telkom is scrambling to cut costs, but the group is still considering paying dividends to shareholders, a move unlikely to go down well with employees and other stakeholders.
Last week, Telkom indicated it could shed 15% of its workforce as it announced the commencement of a consultation process with affected employees as part of a wider effort to reduce costs and increase profitability. As at September 2022 Telkom had 11,788 employees. But while Telkom is clearly focused on cutting costs, it is also looking to reinstate dividends after a three-year suspension in the financial year that starts in April. In a statement, Telkom advised: “The reinstatement of the dividend policy is under consideration and an update will be provided at the end of the financial year.” In the present tough economic environment, this will probably not sit well with those at risk of losing their jobs in the name of preserving cash. The Communication Workers Union (CWU) condemned the fixed-line operator’s plan to shed over 2,000 workers in a few months’ time. The union accused Telkom’s management of using jobs cuts as an easy way to make superficial profits, placing most of the blame on former CEO Sipho Maseko. “These are just lousy excuses of creating ‘artificial profits’ to the benefit of the executive, board members and shareholders… Every two years there were retrenchments and in every other two years there were bonuses and dividends paid among the executives and the board members,” the union commented.
- Read the full original of the report in the above regard by Mudiwa Gavaza at BusinessLive (subscriber access only)
Get other news reports at the SA Labour News home page