South Africa: Neotel starts restructuring with potential retrenchments

Mergers, Acquisitions and Financial Results

Neotel is busy with a process which may see many employees losing their jobs, but the company is not saying anything concrete It is well known that Neotel is not profitable and is struggling in various areas, and if the latest information received by MyBroadband is correct, the company is set to start retrenching staff soon.

According to one MyBroadband member there are massive retrenchments in the pipeline at Neotel. After more than three failed restructuring projects, continuous bad service and failure to gain significant market share, Neotel is about to embark on massive retrenchments,” this poster said.

According to the member, Neotel calls it ‘dismissals’ and he is not particularly impressed with what he calls ‘hard working employees’ suffering from ‘poor management and leadership.’ One senior Neotel employee said that the company is currently busy with a ‘realignment and restructuring process’ which may include retrenchment of some employees.

Neotel was contacted for official comment, but the company did not respond to questions about its plans and what caused the need to potentially fire staff. After repeated requests for information Neotel did send MyBroadband a statement which reads:

“Neotel is in the process of evaluating its business strategy, operational performance, efficiency and competitiveness with a view to ensuring that long-term sustainability is achieved.”

“The Executive Committee and the Board are working to ensure that Neotel is sufficiently geared to meet the challenges brought on by the highly competitive market place in which it operates.”

“As a consequence, the company is considering realignment and restructuring options in order to achieve optimal growth, operational efficiency and improved service delivery to customers