17 January 2020
The Federation of Unions of South Africa (FEDUSA) has calls on government as the majority shareholder in telecommunications utility Telkom with a 39 percent stake to dismiss the entire Board with immediate effect for gross leadership failure over the last five years and a lack of strategic direction and planning. FEDUSA’s calls comes in the wake of management’s letter issued to the South African Communications Union (SACU) – the union federation’s affiliate – and other labour formations on Wednesday, 15 January 2020, in which it gave notice of its intention to retrench 3 000 workers and claimed that its legacy and flagship copper wire business had incurred severe losses and showed no prospects of recovery in the near nor medium futures.
FEDUSA is outraged with the latest development, as Telkom has clearly proved its lack of strategic direction, operational efficiency and technological innovation, by scoring a further own goal in this very matter when its market share and infrastructure remained top class just a few years ago. To compound this injustice to is employees and South African citizens, Telkom has stopped investing in fibre 18 months ago, giving the spectrum to the competition, when it clearly had an outright opportunity of reversing its past failures and restoring credibility to the entity.
As if this was not enough, a further 1000 employees face retrenchments in May 2020 while an estimated 2 000 could also lose their jobs at Telkom subsidiary BCX shortly after that. In addition, despite Telkom’s share price going down about R100 to R20, the CEO and his Executive Management awarded themselves handsome bonuses at the end of last year. This is outright shameful and only affirms the analogy FEDUSA emphasised in November 2019, that Telkom infact holds the title of being the main architect of retrenchments in South Africa, considering the demise of the working-class employees from 69000 to a meagre 10 000 currently.
SACU’s Western Cape Organizer has noted that in the recent past, spanning five years or more, Telkom’s Board has repeatedly shown that it has absolutely no clue of how to solve operational and strategic problems besetting the parastatal. For example, the utility has nothing to show for the R9 billion that the Board borrowed to set up Telkom Mobile (formerly 8ta) while more than R4 billion spent in acquiring BCX five years ago has not yielded any profit at all and retrenchments have been the response to that glaring failure.
It further bears attention that Telkom, through its Subsidiaries are embroiled in multiple Unfair Labour Practices disputes in relation to them reneging on paying consistent benefits to employees that are being restructured into the Company’s different service organisations and subsidiaries. This specifically talks to more than 800 employees on Operational and middle management levels transferred to BCX
FEDUSA therefore calls on Minister Gordhan and Minister Abrahams to immediately intervene in the matter, as the current Telkom trajectory only paves the way for yet another Eskom crisis. The current Eskom Board should be dismissed with immediate effect and equally be declared delinquent for their contributory roles in failing to avert the possible demise of Telkom.
For interviews please contact
FEDUSA Acting General Secretary
079 696 2625
SACU Western Cape Organizer
076 720 2640
FEDUSA Media and Research Officer
072 637 8096
Email: research @fedusa.org.za