Staff cuts to cost Telkom R1.5 billion

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Earlier this year, Telkom announced that it was moving ahead with retrenchments and retirements – and it seems that it is going to cost the company R1.5 billion to do so.

Through a trading update posted yesterday, the company revealed that R1.52 billion has been set aside to lay off just over 3 000 employees.

“Provision for voluntary severance and retirement packages of approximately R1, 523 million affecting 3 108 employees with a related tax benefit of approximately R446 million in the current period,” it said in a trading statement.

It also added that basic earnings for the six month ended 30 September 2015 because it had fewer staff to pay and higher profit on sale of properties.

“The increase in normalised basic earnings for the six months ended 30 September 2015 is mainly as a result of lower employee expenses due to lower headcount emanating from the voluntary severance and retirement packages in the prior financial year,” Telkom said.

The reason for Telkom issuing a trading statement on Monday is because business entities are obligated to publish a trading statement as soon as they become reasonably certain “that the financial results for the period to be reported on next will differ by at least 20% from those of the prior corresponding period.”

In this case, the basic earnings per share is expected to be 45%-65% lower than previously reported, and headline earnings per share is expected to decline 65%-85%. The normalised basic earnings per share should be 10%-30% higher.

[Image – CC by 2.0/Jez Bills]

Charlie Fripp

Charlie Fripp

Charlie started his professional life as a motoring journalist for a community newspaper in Mpumalanga, Charlie explored different journalistic angles since his entry into the fast-paced world of publishing in 2006. While fostering a passion for the arts, Charlie developed a love for technology – both which allowed him to serve as Entertainment and Technology Editor for an online publication. Charlie has since been heavily involved in consumer technology for various websites and publications. He thoroughly enjoys World War II films and cerebral documentaries; aviation; photography and indie music. Oh yes, and he also has a rather strange obsession with collecting coffee mugs from his travels.