Telkom SA delays retrenchments, postpones results due to COVID-19
Telkom South Africa has postponed the planned shedding of up to 3,000 jobs due to South Africa's COVID-19 national lockdown. The operator is also postponing the release of its full-year results by almost a month.
This is according to a statement published by the telco on the Johannesburg Stock Exchange (JSE) news service.
In January, Telkom announced plans to retrench around a fifth of its workforce. In March it said that the retrenchments would cost the operator about R1.5 billion (US$90 million at the time, now $81 million), and have a negative impact on its earnings for the 2020 financial year.
Now it says the cost of its overall restructuring process had reduced down to about R1.2 billion ($65 million) "as a result of the postponement of the retrenchments in light of COVID-19 National Lockdown."
Telkom also announced it would be taking advantage of an extension offered by the Financial Services Conduct Authority and would be postponing the publication of its full-year results.
It said that the country's national lockdown had impeded the company's ability to complete the necessary work required to finalize the annual results by May 25, 2020, and it would postpone the publication to June 22, 2020.
In the last week of March, South Africa began a three-week lockdown to help curb the spread of COVID-19 in the country, which was then extended by a further two weeks. As of May 1, 2020 South Africa began a gradual and phased recovery of economic activity.
The long lockdown period has put major pressure on local businesses and the Reserve Bank expects the SA economy to contract by over 6% this year as a result of COVID-19's impact.
"Telkom's portfolio of businesses is exposed to all sectors of the economy including the sectors that are in distress. The extent of the lockdown and the effect of COVID-19 across our businesses is being assessed and business continuity plans are revised and executed accordingly," it said.
The group's share price on the JSE has dropped by over 76% over the past 12 months and its market capitalization has reduced below net asset value.
Telecommunications are considered an essential service in the country and Telkom said that while 80% of its employees are currently working from home, frontline staff and field service technicians continue to serve customers.
"During the lockdown, Telkom has seen a surge in fixed and mobile network traffic for our telco services from people working from home. Telkom has a scalable network and enough redundancy to manage the increase in demand."
Telkom has also stepped up to try help curb the spread of coronavirus through partnering with the National Institute for Communicable Diseases (NICD) to develop a track-and-trace tool for COVID-19; zero-rating some educational content; and creating a disaster fund supporting the Red Cross for frontline healthcare workers.
— Paula Gilbert, Editor, Connecting Africa