Liquid Telecom has announced a “strategic repositioning” as Liquid Intelligent Technologies, which will include job cuts at the company. The company said in a press statement that the repositioning follows the transitioning of the business over the last two years.
This may, however, be seen by many as candy-coating the fact that the company is planning to retrench a large number of employees. The press statement, which did not mention job cuts, came shortly after Liquid Telecom staff were sent Section 189 notices, informing them of the planned job cuts.
The Section 189 notices state that the company is contemplating dismissing employees based on its operational requirements. “The operational requirements relate to the company’s technological and structural needs,” Liquid Telecom said. It added that it is difficult to estimate the number of employees who may eventually be retrenched because of the proposed restructuring and efficiency measures.
Industry speculation suggests that Liquid Telecom South Africa may cut as much as a third of its workforce. It currently employs 864 people. The company said it envisages that initial consultation meetings will be held this week. It is anticipated that the consultation period will end on 4 October 2020, and that the date of retrenchments will be 4 November 2020.
The latest retrenchments follow large-scale retrenchments at the company in 2018, which were implemented to support its new operating model. Liquid Telecom was asked for comment about its “strategic repositioning” and planned job cuts, but the company said it can currently not comment on the issue.
Strive Masiyiwa struggles to sell stake in Liquid Telecom
This announcement comes shortly after a report that the coronavirus pandemic is hampering efforts by Zimbabwean billionaire Strive Masiyiwa to sell a stake in Liquid Telecom. Masiyiwa is seeking buyers for 20% to 34% of Liquid Telecom for as much as $600 million, according to four people with direct knowledge of the matter.
He needs the money to repay a $375-million loan that was backed by Public Investment Corp (PIC), the continent’s largest money manager, they said. The PIC, which oversees the equivalent of $135 billion mainly on behalf of South African government workers, is demanding the issue be resolved by the end of August after granting an extension on the payment earlier this year, the people said.
The loan it backed was used to fund a pay-TV venture, which failed last year because Zimbabwe’s economic woes and currency shortages meant the company couldn’t pay suppliers.
The 59-year-old tycoon had pledged shares in Liquid Telecom to the PIC as security for the loan, which had been taken out with Deutsche Bank AG. Masiyiwa was planning to repay the debt from the proceeds of an initial public offering in Liquid Telecom, which was scrapped because of volatile equity markets, the people said.
The founder of Econet, which has interests in mobile-phone network operators and digital-banking operations across the continent, would rather sell part of his 66% stake in Liquid Telecom to avoid surrendering shares in the company at a discount to the PIC, one of the people said.
Masiyiwa hired Goldman Sachs earlier this year to sell the stake, but talks with potential investors started unravelling after the COVID-19 outbreak intensified in March, the people said. Buyers wanted more time to assess the economic fallout of lockdowns to contain the virus on Africa’s economies, they said.
