Job cuts at Telkom subsidiary BCX
Telkom subsidiary BCX has become the latest company in the ICT sector to retrench employees.
In a statement this afternoon, the company says it is implementing a new operating model following its analysis of the impact of changes within the ICT landscape, the rapidly-evolving customer demands and the drastic downturn of industries key to its business, brought on by the COVID-19 pandemic.
According to Jonas Bogoshi, CEO of BCX: “The ICT landscape is changing rapidly, and customer demand is evolving at a faster pace. It was important for BCX to consider whether its current model still enables it to deliver on the changes in the market, especially when COVID-19 remains a long-term financial threat to our clients and therefore BCX.
“As leaders, it is our responsibility to address the requirements of the next-generation digital world, whilst balancing the immediate financial challenges presented by COVID-19,” adds Bogoshi.
The company notes that although BCX had considered its strategic approach earlier in the year, COVID-19 created immense financial pressure on the verticals important to its business, forcing it to review its position.
“COVID-19 has had disastrous consequences for our economy, and its impact to our clients has been substantial,” says Bogoshi.
He points out that customer expectations were rapidly changing prior to COVID-19; however, the financial constraints experienced as a result of the lockdown became evident.
“BCX had identified clients' inability to meet financial responsibilities, received increased requests for payment options, identified a reduction in clients' IT spend and reprioritising of business requirements as some of the challenges. This created further pressure on BCX margins and on our ability to generate revenue.”
The implementation of the new business model will entail structural changes to the business, the company notes.
“Due to the implementation of the new operating model as a result of changing market conditions, structural changes were inevitable. BCX served the Section 189 notice to unions and the CCMA in accordance with the Labour Relations Act, this morning.
Bogoshi says: “This is not an easy decision for any management team to make and is never taken as a first line decision. There were various measures implemented to try and mitigate this.”
In January, BCX parent Telkom announced 3 000 jobs will be cut at the telco. Other local ICT companies which have also let go of staff include Cell C, Dimension Data and Liquid Telecom, among others.
BCX did not disclose how many of its employees will be impacted by the job cuts.
The company says it considered the issuing of the section 189 notice to unions following adjustment to its business strategy, the implementation of cost-cutting measures, a reduction in discretionary spend, measures to increase business efficiencies, and by reducing business complexity.
“Unfortunately, these measures could not insulate us from the rapidly-changing ICT landscape, changes in customer demand and the devastating impact of COVID-19,” says Bogoshi.
BCX notes that it informed its employees of the decision at a meeting this morning. “Our main priority is to support our employees over the next few months, as we go through this process together.”