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Inter-Active Technologies joins retrenchment train

Bonnie Tubbs
By Bonnie Tubbs, ITWeb telecoms editor.
Johannesburg, 30 Oct 2014
Inter-Active Technologies CEO Brendan van Staaden says the company is not alone in looking to retrenchments, in an industry where the economy necessitates downscaling.
Inter-Active Technologies CEO Brendan van Staaden says the company is not alone in looking to retrenchments, in an industry where the economy necessitates downscaling.

Business process outsourcing (BPO) company Inter-Active Technologies (IAT) has joined the ranks of other local ICT companies that have gone the retrenchment route, retrenching 4% of its staff due to what it says is "extreme pressure" on SA's economy.

This also comes amid a proposed acquisition of IAT by a "large blue-chip company" (subject to approval by the Competition Commission). The details of the deal are expected to emerge tomorrow, but CEO Brendan van Staaden says this is unrelated to the phased retrenchment exercise it recently undertook.

Van Staaden says, out of the 1 127 people IAT employs, the majority of employees have held their positions, with only a handful having been retrenched to date. Human resources director Vanessa Chambers clarifies that out of these 1 127 employees, 4% have been retrenched.

In correspondence to IAT staff on 11 September, which ITWeb has in its possession, Brendan and IAT MD Jacqui van Staaden informed employees of a restructuring and rationalisation process the company had decided to undertake.

The e-mail stated: "...none are immune to the impact of an economy plagued by poor economic policy, mismanagement of public enterprises as well as the effect of costly strike actions which have negatively impacted upon the South African economy as a whole.

"Unfortunately, despite all of its efforts, Inter-Active Technologies has also not escaped this trend unscathed and unaffected. The board at Inter-Active Technologies continues to weather the economic pressures, yet with the recent downsizing of some of our own customer contracts as well as the unfortunate termination of a longstanding customer relationship which has furthermore placed significant pressure on our business revenues, it is therefore, with sadness and regret that we report the need to embark on the first significant phased rationalisation exercise in the [10-year] history of this business to date."

The staff correspondence, confirmed by Brendan van Staaden as such, indicates the board of directors commenced with a phased retrenchment exercise on 15 September, "aimed at both the rationalisation and maximisation of existing resources, to the benefit of the business in the interest of sustainability and safeguarding the future of Inter-Active Technologies".

Brendan and Jacqui van Staaden add the board will continue to assess the need for further rationalisation - a process it hopes will be completed by the end of the year.

One of many

This comes in the wake of retrenchment processes at some of SA's biggest telecoms firms kicking off in recent months, including Telkom, MTN and - more recently - Cell C. Some of the job cuts look set to reach large scales, with labour unions expressing dread that thousands more jobs could be on the line.

Inter-Active Technologies MD Jacqui van Staaden said in April last year that the BPO industry contributed at least R4.6 billion to the region's GDP.
Inter-Active Technologies MD Jacqui van Staaden said in April last year that the BPO industry contributed at least R4.6 billion to the region's GDP.

Telecoms giant Telkom, which is in phase one of a Section 189 retrenchment process, says it is looking to cut a total of about 2 500 managers over all three phases of this process.

Last month, the Technology Innovation Agency said it aimed to undergo a major restructuring process, and warned this would include retrenchments - with as many as a third of its current 193 employees potentially facing the axe. However, Solidarity this morning said it had managed to halt job cuts for now - at least until March.

Happier times

According to recent BPO statistics from Business Process Enabling SA (BPeSA), the BPO and offshoring sector continues to grow in SA, with the Western Cape maintaining its presence as the largest offshore market with 11 479 jobs, followed by Gauteng with 7 177 and KwaZulu-Natal at 4 951.

Brendan van Staaden said in April last year that SA's BPO industry had grown in 2012, "where the rest of the world experienced either minimal or slight growth in the year".

He added, "With a year-on-year agent growth exceeding 18.5%, the local BPO industry set the stage for growth going forward from 2012. Inter-Active Technologies experienced its own measurable growth during this period and, on the whole, it was a fantastic year for BPO in SA and for business growth and development within Inter-Active Technologies."

Jacqui van Staaden noted the success of the BPO industry was evident in the contribution of at least R4.6 billion to the region's GDP.

In October last year, BPeSA reported that IAT had, in the preceding financial year alone, expanded its national staff numbers from 640 to over 1 000.

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