South African telco, Telkom Group, has announced that it will take formal legal action to restructure the company, according to section 189 of the Labour Relations Act.
The telco claims the restructuring will affect 15% of its workforce, impacting 1,770 jobs, mainly in business and affiliates divisions, to guarantee the company’s viability.
According to the company, “As the group manages the delicate migration of revenue between old to new technologies, it is challenged with managing the costs associated with the different technologies, the competitiveness and sustainability of the group.”
What’s more, Telkom CEO, Serame Taukobong said the impact of sustained load-shedding has put pressure on the company’s costs.
Sidebar Alert: The company has released its financial results for Q4 2022.
Telkom saw a 2.3% increase in revenue to R11 billion ($614,000,321) but a 13.5% decline in earnings before interest, taxes, depreciation, and amortization (EBITDA) to R2.5 billion ($482,998,500), highlighting the company’s ongoing struggles with profitability and bottom-line growth.
Consequently, Telkom plans to implement cost-saving programmes, the benefits of which will become sustainable over the following six to eighteen months, easing cost pressures and boosting the Group’s medium-term profitability.
Telkom added that in addition to cost-cutting measures, the Group plans to raise an additional R1 billion ($55,773,600) by the end of 2023 to lessen the impact of frontloaded working capital investments and ongoing pressure on free cash flow.
Article by: chpoint.africa
February 15, 2023 - BY Admin