Zimbabwe's Econet cuts 100 jobs, cites declining revenue - CNBC Africa

Zimbabwe's Econet cuts 100 jobs, cites declining revenue

Southern Africa

by Reuters 0

Zimbabwe's largest mobile operator Econet Wireless said it would cut 100 jobs. Photo: Pexels

Zimbabwe's largest mobile operator Econet Wireless said on Thursday it would immediately cut 100 jobs, citing a decline in revenue after the national telecoms regulator reduced tariffs charged by operators in January.

Econet reported a one percent fall in revenue during the year to February but analysts expect the company to post a bigger fall in revenue when it reports its half-year results later this month as the effects of the tariff cuts kick in.

Businesses in the southern African economy, struggling to shake off the effects of a steep recession between 1999-2008, are being forced to cut jobs or close due to power shortages, high cost of capital and competition from cheaper imports.

Douglas Mboweni, Econet chief executive said in a statement that the affected employees had been advised of the job cuts.

Mboweni did not say which departments were affected, but added that Econet would give retrenched workers some shares.

"The shares are not part of the retrenchment package but are an incentive for speedy closure of the retrenchment process that will reward long service with the company," Mboweni said.

Econet, the second largest company on the local stock exchange, has more than 9 million users, thanks to a rapidly growing telecommunications sector since 2009, which pushed the mobile phone penetration rate to 106 percent from 30 percent.

In July, Econet asked its local and foreign suppliers to cut prices by at least 15 percent, reduced expenditure and trimmed salaries by 20 percent as an economic slowdown catches up with one of the fastest growing sectors.

Zimbabwe's economy is expected to grow by 1.5 percent this year, half the initial forecast due to weak global commodity prices that have hit mineral exports and a drought.

Comments