One of the biggest telecom companies in South Africa, Cell C, plans to lay off some employees as part of its cost-cutting and operational flexibility strategy. The firm views this as a difficult but necessary decision.
The telco company situated in Buccleuch, Sandton may lay off as many as forty percent of its semi-skilled workers and junior managers. The impacted parties are having discussions, but the telecom maintains that its ultimate decision will be based on the results. The fourth-biggest telecom operator in South Africa, Cell C, has a lengthy history of facing sustainability challenges. In addition to finding it extremely difficult to compete with rivals like MTN, Vodacom, and even Telkom, the operator is in debt to the tune of up to $434 million.
The company is also losing a lot of money; between June 2021 and May 2022, it forfeited close to $150 million. Its revenues decreased from $696 million to $623 million over the same time period. By the end of December 2023, Cell C had lost 2.9 million users and $207 million in revenue. However, the troubled telecom operator maintained its optimism.
The Prepaid Company (TPC), a division of Cell C’s largest shareholder, JSE-listed Blue Label Telecoms, has offered to take over control of Cell C’s operating license and frequency spectrum, according to information disclosed by SA’s telecom watchdog, the Independent Communications Authority of South Africa (Icasa), in December of last year. The corporation claims that an examination of its organizational structure and operational strategy led to its decision to let go of some employees. Although the workforce framework acknowledges that it has evolved over time, it claims that business stagnation has led to role duplication, silos, and operational inefficiencies.
According to Cell C, it reorganized its organizational structure and updated 30 senior management positions earlier this year to align with its new operating model. “Under Section 189A (2) of the Labor Relations Act, the consultation process notifies staff of the possibility of redundancy of certain positions and possible retrenchments.”
Cell C has underperformed and caused large losses for a long time. Early in 2019, a turnaround strategy was implemented. A focus on operational efficiencies is one of the strategy’s pillars, according to a Cell C statement. The statement opined that to turn the business around, efforts to streamline the business have included cost savings through procurement cuts, a year-long hiring freeze, a review and discontinuation of certain product offerings.
