MTN to lay off 403 staff as recession bites

MTN has confirmed it’s to lay off 403 staff in March 2010, after varous reports on Monday that the mobile phone company was planning retrenchments starting in December 2009.

MTN says it plans to reduce its permanent and temporary workforce as a result of the decline in the economic environment.

In a statement, MTN says “Approximately 403 permanent employees may be affected towards the end of March next year, which comprises about seven percent of MTN SA's 4679 permanent employees".

The company would also be reducing the number of temporary employees in its service during 2010 but has not given any details as to the numbers involved.

MTN says 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 3000 people are supplied to MTN by temporary employment services, these numbers would also be reduced during 2010."

It’s also planning the centralisation of support centres and services in order to create economies of scale, integration and consequently, greater efficiency.

MTN said its South African subscriber base had declined linked to the recession, and dropped 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.