Telkom, which has decided to abide by the court order to stop force retrenchments, is looking at other measures to contain costs which include a wage freeze across the board, Voluntary severance packages (VSPs) and voluntary early retirement packages (VERPs).
Sipho Maseko, Telkom CEO said on Monday the company was also Investigating flexible working hours (flexi-time), potential outsourcing options, reduced working hours in the form of a shorter work week and new methodologies to improve productivity.
Telkom was planning to retrench up to 4 400 employees while a further 3 400 may be transferred to other companies before the forced retrenchments was stopped by a court order.
Maseko said VSPs and VERPs packages on offer will be significantly more generous than those required by law and will be available to all non-unionised staff as from today. Telkom is targeting not unionised members who accounts for 40-45% of its workforce with its VSPs and VERPs.
Telkom will engage with organised labour and will be seeking the consent of the unions to extend the offer to union members as well.
“We must take urgent steps to place the business on a stable footing,” said Telkom CEO Sipho Maseko. “My executive team and I believe these measures are necessary as our business is simply not sustainable in its current form. Our revenue to staff cost ratio remains significantly higher than industry norms. Compared to similar-sized telecommunication companies we have up to 30% more full time employees than our peers. This makes it increasingly difficult for us to compete.”
This is part of Telkom’s R1 billion in annual cost savings for the next five years.
In the last eighteen months, Telkom has successfully delivered on a number of areas of focus within its multi-year turnaround strategy. “We have renegotiated contracts worth over R10bn, sold properties worth more than R750m, and have consolidated our head office into a single location,” said Maseko.