Recent financial reports from South Africa’s leading telecommunications companies reveal impressive performance by Vodacom and MTN, which have notably higher productivity than Telkom.
To measure productivity, Daily Investor utilised revenue per employee, which is calculated by dividing a company’s revenue by its number of employees. This ratio is instrumental in evaluating an organisation’s efficiency and output.
Companies naturally aim for a higher revenue-per-employee ratio, a sign of enhanced productivity. Telkom’s strategic use of these ratios is a reassuring example of how it optimises its performance.
Established in 1991 following the Department of Posts and Telecommunications (DPT) bifurcation, Telkom initially grappled with an inflated workforce, a legacy of its government department origins.
Over the years, Telkom grappled with low revenue per employee, leading to significant workforce reductions. The impact was substantial, with the company’s employee count plummeting from 61,237 in 1999 to 23,520 a decade later.
Despite these substantial staff cuts, Telkom still lagged behind its industry counterparts in efficiency. Former CEO Sipho Maseko acknowledged Telkom’s poor performance, citing high employee costs and low revenue per employee relative to benchmark averages.
Under Maseko and subsequent CEO Serame Taukobong, Telkom continued its efforts to enhance efficiency through further staff reductions.
As per its latest financial report, Telkom’s employee count stood at 9,877, representing a 15% decrease from the previous year. Over the past 25 years, Telkom, a prominent telecommunications employer, has downsized its workforce by 51,360 jobs.
Despite these significant cutbacks, Telkom’s revenue per employee still lags behind Vodacom and MTN, reflecting their differing product mixes. Telkom’s focus on fixed access lines and resource-intensive services calls for a larger workforce, in contrast to the predominantly mobile services offered by Vodacom and MTN, which require comparatively fewer employees.
