Telkom rises 8% after saying it may cut a fifth of its workforce

A shopper walks past a Telkom shop at a mall in Johannesburg. Picture: REUTERS/SIPHIEW SEBEKOrose as much as 8% on Thursday, amid news it may cut up to a fifth of its workforce as it battles declining income from its fixed-line services.

Telkom informed unions on Wednesday about the possible job cuts, which will take place across departments, but will particularly affect its Openserve unit, which suppliesTelkom had given multiple reasons for the cuts, but they included declining fixed-line use as well as a constrained operating environment, said Linda SenekalSolidarity was “shocked” by the news, but it was expected that in an effort to minimise dismissals, the company would make available voluntary severance packages, she said.

Meetings between Telkom and organised labour were scheduled for next week, Senekal said, and it was expected this process would be concluded by the end of April. As of the end of September, Telkom had 15,197 employees. During its half year to end-September, the company's operating revenue had grown 4.7% to R21.5bn, although this had largely been due to growth in mobile service revenue — which rose 56.6%.In morning trade on Thursday Telkom's share price was up 5.46% to R36.52, having earlier risen as much as 8%.

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