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Johannesburg - About 4 200 Telkom employees have accepted voluntary early retirement and severance packages at cost of R2.2bn to the company, according to a market update.
Telkom, in a statement to shareholders on Monday, said its full-year financial results for the period ended March 31 2016 are expected to be impacted by the company’s job cuts drive.
Last year, the telecoms company started shedding jobs as part of its turnaround process. In a quarterly report released in August last year, Telkom at that stage said that it had spent R1.1bn on voluntary early retirement and severance packages.
But since then, the company's job cuts bill has doubled.
“The 31 March 2016 results to be reported on includes the impact of the company’s voluntary early retirement (VERP) and voluntary severance packages (VSP) offered to employees over the twelve month period of approximately R2.2 billion with a related tax impact of approximately R500 million that are not considered results from normal business operations,” said the company.
“During the period, approximately 4 200 employees accepted VERPs or VSPs,” the company added.
The company said its reported headline earnings per share (HEPS) is expected to decrease by 40%-50% when compared to the previous financial year.
Meanwhile, its basic earnings per share (BEPS) is set to fall by 20%-30% for the full-year ended March 31 2016.
“On a normalised basis, i.e. excluding the impact of voluntary early retirement and voluntary severance packages and the related tax benefit, HEPS is expected to increase by 10% to 20% and BEPS is expected to increase by 30% to 40%,” Telkom said, highlighting the impact of the job cuts.
The company further said that the main difference between its BEPS and HEPS is “increased profit from the sale of property recorded during the twelve months to 31 March 2016”.
