South African telecoms group Telkom has announced that it will embark on a restructuring process that will affect 15% of its 11,000 plus workforce.
In a statement on the Johannesburg Stock Exchange news service, the company stated that the process will impact all business units and subsidiaries and is intended to ensure the sustainability of the group.
“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.
Management has therefore embarked on a restructuring programme, which includes the S189A process, to optimise Group costs in line with evolving technology capabilities and demands,” reads the statement.
In its Q3 financial results for the period ended 31 December 2023, Telkom reported that its revenue was up 2.3% to R11 billion but its earnings before interest, taxes, depreciation, and amortisation (EBITDA) are down 13.5% to R2.5 billion, showing the company’s continued struggle with profitability and bottom line growth.
To address these challenges, Telkom stated that it was planning to embark on cost-saving programs to be implemented with sustainable benefits materialising over the next 6 – 18 months to mitigate cost pressures and improve the group’s medium-term profitability. The benefits of the initiatives, including the restructuring, are expected to be tangible in the next few years.