Telkom South Africa is planning to lay off up to 15% of its workforce as part of a new restructuring program to cut costs. The partially state-owned operator has started a formal consultation process for retrenchments that will impact all business units and subsidiaries and is intended to ensure the sustainability of the group in the long term.
Telkom's job cuts are part of a global trend of technological redundancies. After thousands of job cuts at companies such as Meta and Twitter last year, Google, Microsoft and Amazon plan to cut 40,000 employees together this year.
It has been systematic for Telkom to reduce its staff over the past few years as the company evolves away from legacy broadband technologies like copper and moves customers over to either fiber or wireless options, which tend to have lower profit margins. Telkom's staff count in 2013 was a massive 21,209 employees, but by 2019, it had been reduced to 15,197. At the end of September 2022, Telkom had a staff of 11,788; therefore, a planned 15% reduction in that number would mean around 1,768 jobs are on the line in 2023.
As part of a trading update for the quarter ended December 31, 2022, Telkom reported that group revenue was up just 2.3% year-over-year (YoY) to R11 billion (US$613 million), while group earnings before interest, tax, depreciation and amortization (EBITDA) dropped 13.5% to R2.5 billion (US$139 million).
The EBITDA figure was impacted by increased power cuts in South Africa (known locally as loadshedding), which resulted in a YoY increase of more than R150 million (US$8.4 million) in additional costs in the quarter alone.
