500 to lose jobs at MTN

Johannesburg - MTN SA plans to reduce its permanent and temporary workforce as a result of the decline in the economic environment, the cellphone company said on Monday.

"Approximately 403 permanent employees may be affected towards the end of March next year, which comprises about 7% of MTN SA's 4 679 permanent employees," a statement read.

The company would also be reducing the number of temporary employees in its service during 2010.

To mitigate the effects of possible job losses, a proper consultative route, firstly to avoid retrenchments and redundancies, and secondly to mitigate its adverse effects will be followed, in line with legal requirements.

"Severance of two weeks' pay for each completed year of service is payable and if retrenchments are inevitable, affected staff will be given time off to seek alternative employment well in advance of working their notice periods."

Re-employment agreements would be entered into for a period of six months.

"In light of greater efficiencies that are being achieved, together with the decline in the customer base, it is foreseeable that fewer resources will be required in the near future. Since approximately 3 000 people are supplied to MTN by temporary employment services, these numbers would also be reduced during 2010."

In addition to the reductions in its workforce, MTN was "re-engineering" its business in response to an outlook of lower growth due to the global recession and Rica compliance issues.

These initiatives included business process re-engineering in order to achieve process delivery effectiveness, seamlessness of operations and fast, responsive turnaround times.

Another initiative was the centralisation of support centres and services in order to create economies of scale, integration and consequently, greater efficiency.

The company would provide franchise opportunities on selected MTN SA outlets, and in so doing decrease operating expenditure substantially.

Other initiatives included increased innovation in all segments of the MTN SA value chain and the reduction of costs and the curtailing of unnecessary expenditure throughout all levels in the company.

There would be an increased and targeted focus on sales and marketing strategies aimed at revenue creation and financial sustainability and the delivery of a robust, quality network to MTN SA's customers in order to retain the existing customer base.

MTN said its South African subscriber base had - linked to the recession - declined from 17 231 000 at the end of June 2009 to 16 419 000 at the end of September 2009, which translated into "negative net connections" of 750 000.

- Sapa