Predictions about technology eventually snatching jobs have been around for a while and South Africa is starting to feel the effects. Telkom this week announced its intention to retrench 15% of its employees – and it says technology is to blame.
“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,” says Telkom.
Telkom joins the tech retrenchment trend
The telecom giant, which has moved at a snail’s pace to catch up with the latest tech, says it plans to restructure operations and save costs. The move is expected to also affect its business units and subsidiaries.
The announcement to enter into an S189 retrenchment process was made on Tuesday after releasing its trading statement for the third quarter that ended 31 December 2022.
Telkom grew its Group revenue by 2.3% which it says was driven by the growth in new-generation technologies and increased data consumption.
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We blame load shedding and other things
In addition to the changes in technology, surprise surprise, the telecom also blames the ongoing load shedding that most South African businesses continue to endure.
“The ongoing instability of electricity supply in South Africa saw accelerated load shedding continuing into Q3 FY2023 which impacted profitability as it inflated the cost base and had an impact on service revenue,” reads the Trading update.
Telkom says its mobile sites are partially backed up through battery power, however, it says access to “network availability is materially reduced during load shedding stages 4 and beyond.”
On the list of other factors that saw an unfavourable period for Telkom are the interest rate hikes that continue to spike, the high cost of energy, and fuel prices. Telkom also notes the “inflationary pressures on the cost of living”.
It says South Africa’s muted economic growth placed affordability at the forefront of consumers’ minds.
Source: via Moneyweb