HARARE: Econet Wireless Zimbabwe, the country’s largest mobile operators said to date it has saved $70 million after undertaking a number of cost containment measures. In June the mobile operator ordered its suppliers, foreign and local, to cut costs by 15% adding that its staffers had voluntarily agreed a 20% salary cut as the company moved to contain rising costs.
“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,” chief executive officer Douglas Mboweni said.
Mboweni said the 46 employees released by the mobile operator “had other issues related to their contractual obligations” which he was not at liberty to disclose quashing claims Econet had dismissed “hundreds” of employees. He said the release of the employees was not part of the cost cutting measures.
“We as a company opted to cut all salaries by 20% 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,” Mboweni said.
He said given that Zimbabwe primarily uses the United States dollar and yet gets most of its consumer imports we from South Africa, whose currency has tumbled more than 40% over the last five years to the dollar, the impact of salary cuts was not as serious as people feared.
“We did a deep analytical study of this and concluded that a 20% salary cut was the best approach. In Zimbabwe we need to remember that the United States dollar is a double edged sword for this country. We should really consider quoting goods in rands, even when paying in dollars. It could help ease our liquidity situation.”
The Econet boss said whilst 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 need to play their part by not unnecessarily destabilising industries that are stable,” he said.
