South African telecommunications giant MTN Group may lay off about 850 managerial staff, according to a trade union official.
“We have just received a massive retrenchment notice at MTN,” Reuters quoted Marius Croucamp, spokesman of the Solidarity Union, a trade union that negotiates on behalf of its members and attempts to protect workers’ rights.
MTN has expanded rapidly since it was founded in 1994. But Nigeria, Africa’s largest economy has been its largest market, with 21.5 percent revenue increase to R27.099 billion ($2.5 billion) reported in the half year ended June 30, 2014.
The telecoms company has struggled in its native South Africa as revenues dropped 7 percent to R19.157 billion ($1.8 billion) at the end of the first half of the year. Aside a slowed growth path, the telco faces stiff competition at home; its local market is dominated by Vodacom, which holds over 50 percent market share. MTN and Cell C account for the remaining half.[eap_ad_2]
According to a February report by JSE-listed company Blue Label Telecoms, MTN holds 32 percent of the South African telecoms market, dropping 2 percent from 36. Cell C grew its market share by 42 percent from 12 percent to 17 percent.
The Group had during the interim results presentation recently expressed hope of returning MTN South Africa’s EBITDA margin from 33.3 percent to 35 percent. It intends to achieve this partly by cost cutting, which it said would include headcount reductions.
As at 12:34 GMT on Monday, MTN’s shares were down 1.81 percent at R24,250 ($2,263). (VENTURES AFRICA)[eap_ad_3]