The News:
- South African telco Cell C is considering downsizing its workforce to reduce costs and improve flexibility in operations amid several challenges.
- According to the company, the development is challenging but unavoidable, and approximately 40% of its junior management and semi-skilled employees may be affected.
- The telco disclosed that the ultimate decision will be contingent upon the results of the ongoing discussions with the relevant parties.
Cell C says a review of its organisational structure and operating model led to this development. While acknowledging that the workforce framework has evolved, it emphasised that business stagnation has been a significant issue, resulting in silos, redundant roles, and operational inefficiencies.
The telco further stated that it modified thirty senior management positions earlier this year to comply with the new organisational restructuring and operating model.
The business has previously encountered similar challenges, including subpar financial results and patchy service. In June 2020, it announced plans to lay off 960 employees. The non-payment of bonuses had prompted the employees of the financially strapped company to stage a protest approximately a year prior.
Its workforce had shrunk from about 2,600 to 900 as of September 2023. Cell C saw a 4.59 million decrease in customers between June 2022 and September 2023, or roughly 36% less in just 15 months.
In November 2023, the telco issued a trading update that included audited figures for 2021 and 2022. The report identifies significant financial difficulties for the company, exacerbated by a declining user base and stagnant revenue.
In the same month, Cell C requested to have its telecom licences transferred to shareholder Blue Label Telecoms.
The South African telco clarified that because its major shareholder held more than 50% of its shares, it had applied to ICASA to transfer control of its telecommunications licences.
The Prepaid Company (TPC), a division of Blue Label Telecoms, is raising its ownership stake in Cell C from 49.5% non-controlling to 53.5% controlling.
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In these circumstances, Lyca Mobile, the world’s largest mobile virtual network, ceased operations earlier this month, concluding a seven-year partnership with Cell C in South Africa.
