As JSE-listed Telkom's “Telkom 2.0” turnaround continued to gain traction, the telecommunications group has confirmed that nearly 8 000 employees would be impacted in one way or another.

The group, which had shaved 1.2% off its operating costs in the financial year to March 31, in part owing to a 4.5% reduction in headcount during the first chapter of its turnaround, now planned to cut the tally of its 18 333-strong workforce even further.

The renewed offering of voluntary severance packages (VSPs) or voluntary early retirement packages (VERPs) was expected to net the company a headcount reduction of 4 400, Telkom group communication and public relations managing executive Jacqui O'Sullivan explained.

However, there were indications that retrenchment through the Section 189 process could potentially be pursued should Telkom not meet its reduction target.

As previously announced, around 3 400 staff would be outsourced to other companies through a Section 197 business transfer process or enter Telkom’s enterprise development programme, which would allow former Telkom employees to contract their services back to Telkom.

As a separated wholesale entity, Telkom Wholesale would hold around 4 000 full-time employees.

“Telkom is now in the second year of its multiyear turnaround strategy. Initial cost savings, major management restructuring and efficiency actions have delivered important improvements.

“However, these next restructuring actions, which will effectively reshape Telkom’s operating model for the future, are critical to ensure the long-term commercial sustainability of our business,” she said.

In the year to March, employee expenses, including salaries and benefits, were down 3.6% to R8.7-billion after a 4.5% reduction in headcount; however, a 6.2% average salary increase for bargaining unit employees and a 6% average salary increase for management employees had offset the gains.

Severance packages had already cost the group R591-million in the 2015 financial year.

Telkom had noted at a presentation of its full-year results on Monday that it needed to move towards a “leaner and more productive” workforce, with its ambitions of achieving a staff cost to revenue ratio of 25% over the next four years set to be accelerated in the 2016 financial year.

“Telkom proposed [to trade unions] the activation of working groups while, at the same time, making the VSPs and VERPs open to interested and affected Telkom staffers. The proposal was not well received by organised labour,” O'Sullivan said of the outcomes of an engagement with unions within Telkom’s “restructuring forum” this week.

In a statement released following what Solidarity dubbed “information session” with Telkom on Tuesday, the trade union had criticised the telecommunications group’s plans.

Solidarity communications industry leader Marius Croucamp said “each and every” Solidarity member’s retrenchment would be questioned, demanding that the job cuts be motivated at “company level, as well as at departmental and service level” in Telkom.

“… we are still questioning whether this drastic action will put the company on a sustainable path,” he said.

O'Sullivan said a company forum meeting scheduled for Wednesday would be postponed until June 18 in a bid to work with the unions and “find a way forward to best manage this process”.