Econet restructuring pays off

HARARE - Zimbabwe's largest mobile telecommunications operator by subscriber base, Econet Wireless (Econet), says its recent restructuring exercise is now paying dividends.

The group’s chief executive, Douglas Mboweni, said the Zimbabwe Stock Exchange-listed company was now poised for growth and expansion due to a leaner and efficient workforce.

“We have cut costs by almost $70 million to date and restored strength and stability to our cost structure. We are ready to weather any storm as a company, it’s part of our DNA,” he said.

This comes after Econet — one of the country’s largest and most preferred employer — has been under fire for allegedly dismissing “hundreds” of employees in the past few month.

However, Mboweni said a total of 46 employees had been released by the mobile operator to date, and that they were not released as part of cost cutting measures.

“We as a company opted to cut all salaries by 20 percent rather than undertake wholesale retrenchments.

“This, we did after full consultations and consent of the majority of our staff. The small number of people we released had other issues related to their contractual obligations, which I’m not at liberty to discuss,” he said.

The Econet boss said given that Zimbabwe primarily uses the United States dollar and yet gets most of its consumer imports from South Africa, whose currency has tumbled more than 40 percent over the last five years to the dollar, the impact of salary cuts was not as serious as people may fear.

“We did a deep analytical study of this and concluded that a 20 percent salary cut was the best approach.

“In Zimbabwe we need to remember that the US dollar is a double edged sword for the country.

“We should really consider quoting for goods in Rands, even when paying in dollars, it could help ease our liquidity situation,” Mboweni said.

He added that while no one liked to cut salaries given the current economic environment it was a better option than wholesale retrenchments.

“We all need to try and protect jobs but regulators like Potraz (the Postal and Regulatory Authority of Zimbabwe) need to play their part by not unnecessarily destabilising industries that are stable,” he said.

Mboweni said Econet is a high performance environment and the company’s staff know what is expected from them.

“We operate as a subsidiary of an international company, and we try to meet international standards of performance and service set by our head office in South Africa,” he added.

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