Telkom has announced that it plans to undergo a major restructuring of its business, including outsourcing non-core operations, rationalising its IT systems and closing some of its retails stores. The purpose behind these changes is to reduce costs and improve efficiencies in the business.
The company has said it plans to keep job losses at a minimum during this restructuring and had denied claims made by labour union Solidarity, that it plans to cut jobs in the field service/maintenance division.
“When Telkom initially embarked on its turnaround strategy, the company stated that it would look at alternatives, such as joint ventures, to ensure that job losses would be avoided and only used as a very final course of action,” Telkom said.
“To this end, Telkom has completed a stringent procurement process and has identified external companies to undertake call centre operations, the management of IT legacy systems, a company to undertake the management of Telkom warehouses in the supply chain area of the business, as well as a company to take over internal printing activities.”
Affected employees will be transferred to their new employers in the coming months.
In addition to these changes Telkom had also previously announced plans to reduce its vast property portfolio and relocate from its head office in Pretoria to its campus in Centurion, as a further cost saving measure.
Last week in President Jacob Zuma’s State of the Nation Address he said that Telkom would be the “lead agency” to assist with government’s ambitious national broadband plans.
According to a recent report by Bloomberg, South Africa will push Telkom to provide cash for a government-backed expansion of broadband Internet access to most citizens.
“The broadband proposal may cost as much as 98 billion rand ($8.36 billion) to deliver and will be funded by the sale of mobile frequencies and from the government budget as well as resources from Telkom, which is almost 40 percent-owned by the state. The cost could be offset by savings as the government shifts public services online,” Telecommunications Minister Siyabonga Cwele said.
“Telkom welcomes the announcement of the government’s decision to appoint the company as South Africa’s national broadband champion,” and the company will “drive collaboration between government and industry” to set up the network, said Jacqui O’Sullivan, a spokeswoman at Telkom.