Gijima to retrench 300 employees to ensure stability
ICT services company Gijima is retrenching, and 300 employees within the firm are likely to be affected.
Maphum Nxumalo, group CEO, announced last week in an internal memo that the company envisages a reduced size in its staff complement in order to ensure the sustainability of Gijima.
Gijima said the move was informed by the uncertainty and prolonged effects of the COVID-19 pandemic, which has had major economic consequences on businesses globally.
As a result of this, Gijima said, it has seen the collapse or destabilisation of major industries such as mining, manufacturing, healthcare, tourism, agriculture as well as infrastructure, which include key clients of the firm.
Despite the challenges, which forced some companies to retrench or implement salary cuts, Gijima said it opted to do none of the above, even at the height of the total lockdown, as it focused on the livelihoods of its staff members.
Nonetheless, in a memo to staff, Nxumalo said the company will now be reducing the size of its staff complement.
“At this stage, we contemplate that 300 employees within Gijima Holdings and Gijima Holdings SA will be likely to be affected.
“Before making any final decision regarding this proposed restructure and the possible redundancy of roles, the company will fully consult with you on the rationale for the restructure, as well as the options considered and possible alternatives.”
The memo continued: “The consultation process will begin immediately. You will be advised on dates for further consultations. As prescribed by S189 (3) of the Labour Relations Act, 66 of 1995, as amended, a thorough consultation process will be followed with all potentially being affected.
“We acknowledge that the process is very unsettling and we urge you to please remain positive and focused and bear in mind that our end goal is to ensure that we run a fair and objective process.”
Moreover, Nxumalo said, prior to the start of the COVID-19 pandemic, Gijima’s board of directors and management had identified that the company’s “organisational structure is grossly overstaffed since 2016 and causing a burden on the company finances”.
Additionally, he said, there was a concern around staff under-utilisation, low revenue per staff member versus costs.
“A substantial number of Gijima staff are not fully billable or are not in revenue generating roles,” he noted.
Other challenges identified by the company include lack of competitive pricing from certain suppliers and high rental cost at Samrand office park, which resulted in Gijima moving to “new consolidated and affordable” office space in 2021.
As a result of the above, Nxumalo noted, the board and management agreed to implement a cost saving strategy in an effort to optimise operations and set up the company for sustainable, profitable growth.
In an effort to implement the much-needed cost cuts, he said, Gijima management rolled out alternative cost saving measures, including restructuring of its subsidiary, Gijima Specialised Solutions (GSS), and implementing S197 of the Labour Relations Act, downsizing and consolidation of all its national offices.
The company also rolled out a full work from home policy and reduced working hours to reduce operational costs.
However, Nxumalo said, while the above measures showed some cost saving success in some areas, these did not render the required saving needed for business sustainability, hence the need to embark on the current retrenchment exercise.