MB Technologies has closed down its Channelware division because the offering wasn't working, and retrenched about half the unit's staff, with just weeks to go before the festive season.
Channelware was MBT's small and medium business-focused distribution arm, with branches around the country that offered a walk-in facility. It was launched about two years ago to better serve the SME market.
MBT CEO Glenn Fullerton says the concept was not gaining traction after two years of incubation, and he had to take the tough decision to close it down.
The realignment forms part of MBT's efforts to focus on efficiencies, as well as better serve the SME market and offer a wider range of products, as Channelware only carried a limited range, explains Fullerton.
However, in closing down the unit, 24 staff members out of the original base of 46 have been retrenched. Fullerton says it was a “tough decision” over which he “lost a lot of sleep”, but MBT has followed all the requirements of the law in retrenching staff and has “done it properly”.
MBT has also provided retrenched staff with good packages that will ensure “they will be fine to well beyond Christmas”, says Fullerton. As far as possible, staff members have been absorbed into MBT, he says.
The retained staff will form teams focused on the SME sector, says Fullerton. He says the knowledge built up over the past two years by Channelware staff members will aid MBT in growing its focus on the SME sector.
Clever idea
Fullerton says Channelware was majority held by MBT, with about 90%, and the balance was owned by management. It was originally set up to provide convenience to smaller companies in the reseller market.
service the SME market by shutting it down, he says.
Its Bloemfontein and Nelspruit, branches will remain open, trading under the Tarsus brand, and the rest of the branches have been closed. Channelware had 10 branches around SA, but consolidated its East Rand, Midrand and Pretoria branches a few months ago.
Fullerton explains the realignment will allow MBT to better serve the smaller resellers, where the demand is for a range of products and not the walk-in convenience offered by Channelware. “The market is more price sensitive than driven by convenience.
“Over the last two years, there has been a substantial investment in further understanding the SME market and addressing the skills to service it.”
The regions that had been served through Channelware will, as far as possible, be served through the company's other units such as Tarsus, Advanced Channel Technologies and Platinum Micro.
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