Cell C announces layoffs as restructuring continues

Cell C announces layoffs as restructuring continues

According to Reuters and local press reports, South Africa's third-biggest operator, Cell C, has announced plans to lay off more than 38 per cent of its workforce.

About 960 workers, from a workforce of 2,500, will be made redundant as the company restructures its operations to align the organisation with what is described as its new operating model.

Discussions with junior management and semi-skilled staff are already under way on job cuts. However, reports suggest that the company is also looking at a number of ways to re-skill some of the affected employees. 

Cell C, which is third in the market behind MTN and Vodacom, has not performed well in recent years, generating significant losses. This led to the launch of a turnaround strategy in early 2019 that focuses on cost savings through procurement cuts, a year-long hiring freeze, a review and discontinuation of certain product offerings. As part of this strategy Cell C recently reviewed its operating model and organisational structure, a process that affected 30 senior management positions in May.

Meanwhile, press reports have been full of stories about potential suitors for the company. In January Vodacom Group Ltd was said to be in talks with Cell C Pty Ltd about taking on the smaller operator’s contract-paying customers. In November last year it rejected a takeover offer from semi-privatised South African wireline and wireless telecommunications provider Telkom SA. And the recent news that Orange is considering an entry into the South African market within months has provoked a flurry of speculation about whether this would involve an investment in Cell C – or even the purchase of the company.

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