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TMCNet:  Labour: telecoms job cuts worrying [ITWeb]

[September 01, 2014]

Labour: telecoms job cuts worrying [ITWeb]

(ITWeb Via Acquire Media NewsEdge) Despite a recent advertisement, MTN's plan to axe close to 1 000 employees confirms a worrying trend within the local telecoms sector.

Mobile giant MTN and the Solidarity trade union will be locked in discussions today over the company's plans to axe close to 1 000 workers by the end of next month, after the union cried foul over procedural matters related to the process.


At the same time, some organised labour bodies have expressed concern over the retrenchments within the country's telecoms sector, questioning whether companies are being entirely sincere about reasons for the current downsizing trend, which will see thousands left without jobs.

MTN recently issued employees a Section 189 notice, informing them it intends to lay off 847 staff members in managerial positions. However, Solidarity spokesman Marius Croucamp says the union is unhappy with the company's failure to mention, in its letter to employees, that registered trade unions may represent their members during the layoffs.

"Solidarity will meet with the company's management regarding the planned layoffs shortly. We will then officially raise objections to the employer's failure to inform employees that they are entitled to receive assistance from their trade unions during the process," says Croucamp.

This is the second lot of large-scale retrenchments under way in SA's under-pressure telecommunications sector, with fixed operator Telkom intending to cut as many as 2 500 managerial positions. The company is in the first phase of its organisational restructuring, following consultations with labour unions. During this phase, 375 managers are expected to be shown the door.

More to come Both Telkom and MTN have cited tough trading conditions, under-pressure earnings and thinning margins as the main drivers for trimming costs and streamlining operations. Industry analysts, meanwhile, have warned the current wave of retrenchments is a "natural progression" that is expected to continue for the time being.

According to pundits, the telecoms sector is dealing with the challenges of a mature market and a tough economic climate, following two decades of unbridled growth and massive profits.

In a recent statement announcing its intention to shed jobs, MTN chief human resource officer Themba Nyathi stated: "MTN is driving a group-wide strategy to respond to challenging market conditions by improving its operational efficiencies and adapting its business model so as to continue expanding our product offering into the digital space.

"As part of this process, and as announced in our interim results on 7 August 2014, MTN SA will continue to review its cost structures, including employee costs, to ensure better alignment with revenue performance and the changing needs of the business and our clients." Strategic moves? However, Communication Workers Union (CWU) president Michael Hare this morning described the job haemorrhaging within the telecoms space as "shocking" and questioned whether there is not more to the problem than pure economics.

While the CWU does not have any members within MTN, it does represent a large number of Telkom employees. The companies are in the process of finalising a deal in which MTN would get access to Telkom's radio access network, and Hare speculates the two might be rightsizing their staff numbers to pre-empt potential duplication once the agreement is concluded. At this stage, he says, it appears 128 Telkom staff members would be affected by the MTN-Telkom deal.

"I am rather suspicious that this is happening so close to the deal. This might be more strategic than simple cost-cutting and tough market conditions." Hare expects Vodacom to also embark on rightsizing ahead of the conclusion of its buyout of second network operator Neotel, and says this is likely to happen before the deal comes before the competition authorities.

However, Richard Boorman, executive head of corporate communications at Vodacom, recently said the company is "certainly focusing on managing costs", but it does not have any plans "when it comes to job cuts".

Dynamic process While the country's third Mobile network operator, Cell C, has not announced any plans to shed jobs at this stage, it seemingly left the door open with an ambiguous statement issued this morning: "Cell C is continuously assessing the operational requirements and needs of certain areas in the company in order to enhance efficiencies, streamline the business and avoid a duplication of functions.

"This process is dynamic and has in the past and may in the future result in restructuring and/or optimisation in the company from time to time. This is not a financial or cost saving issue, but is simply about efficiencies. We have a clearly defined strategy and we have to align our structure with our objectives." Ahead of this morning's meeting with MTN, Croucamp said the union would try and push back the company's retrenchment deadline, should time be an issue. "Section 189 of the Labour Relations Act stipulates that an employee has the right to be represented by a registered trade union, of which he or she is a member, during retrenchments.

"If there isn't sufficient time for trade unions to consult with the employer regarding the layoffs, we will request that the process be extended," he added, alluding to the company's intention to finalise the lay-offs by the end of October.

(c) 2014 ITWeb Limited. All rights reserved. Provided by SyndiGate Media Inc. (Syndigate.info).

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