CWU on Telkom’s jobs
15 February 2023
The Communication Workers Union (CWU) is alarmed at the scale of job losses in the Information, Communication and Technology industry as a whole. This is after Telkom Group issued out a notice in terms of Section 189 and 189 (A) yesterday (2023/02/15) to recognised trade unions in the company. These retrenchments will affect jobs in Telkom SOC, Openserve and GYRO but also have effects in a number of subsidiary companies within the group, that includes PERX and SMOLLAN.
The union condemns and rejects a decision by the Company to slash jobs that will affect over 2000 workers in a few months time. Since the arrival of the former Group CEO Sipho Maseko, CWU has been consistently in warning about the Maseko’s euphoria as he was hailed as the right person for the job. The Maseko’s tenure in office was well masked as a revenue driven era, yet the truth is that there was a decline in business but through retrenchments and disposing of property at every interval, created a perception that the company was doing well, hence in every 2 years there were retrenchments and in every other two years there were bonuses and dividends paid amongst the executives and the board members.
However on the hindsight, the reports are indicating that this strategy is not sustainable and is detrimental to the existence of the company. As in 2014, the company had a net debt of R545 million and when Maseko left the company in 2022, the net debt was sitting on R16 billion (Daily Investor story 4th January 2023). The tactical move on BCX acquisition and neglecting Telkom’s fibre rollout when there was erosion of copper network is a clear indication that there was nothing done to improve the business and effectively compete in the telecoms space. The fibre rollout project would have led to Telkom’s domination in the market. With the appointment of the new Group CEO, Taukobong; there was a breath of the fresh air, however and unfortunately it appears as if he is following on the footsteps of his predecessor which will bare disastrous end results which may lead to a complete closure of Telkom.
Telkom has been in the jobs reduction project in segments of every 2 years in this following sequence; 2014, 2016, 2018, 2020 and now 2023 and the rationale behind these jobs bloodbath is the same with a few senseless additions such as the release of Spectrum, load-shedding and COVID 19 lockdown. These are just lousy excuses of creating “artificial profits” to the benefits of the executive, board members and the shareholders. The fact that during the period of lockdown regulation, telecoms were thriving as most businesses relied on their network (communication)to conduct the day to day running oftheir businesses contradicts Telkom’s rationale to cut jobs.
The champion and architecture of this process is the former CEO Sipho Maseko, who in our view was a BAIN Consultant project. This led to the institution shrinking from being one of the giant telecoms in Africa to just an entity in South Africa. Indeed, there is a consistency on the reasons behind the retrenchments since the arrival of Maseko to date, as they are always outlined as follows; (1) A decline in operating revenue, (2) A decline in the voice revenue, (3) A decline in the EBIDTA margin, (4) Increase in negative press cash flow, (5) and an increased competition from global cloud providers (hyperscalers) and the Over The Top (OTT) services. This effectively means that the management of Telkom is unable to navigate around these challenges for almost 10 years but continues to get bonuses at the expense of workers.
CWU intends to challenge the retrenchment process once again using all the available legal avenues. The union will also meet its membership base to decide on the action that will be mass base.
Issued by Aubrey Tshabalala, General Secretary, CWU, 15 February 2023
