On Thursday evening, TSTT announced that it would be retrenching 503 workers, including Clyde Elder, head of the company's lead labour union, the CWU.
It was a brisk, but not unexpected action from a company that had been signalling for more than a year that it needed to rightsize its employee profile to meet its profit and performance goals. To speed up the process, the company will pay all affected workers 45 days’ pay in lieu of notice over and above their vacation settlements and retrenchment packages.
On Friday, TSTT CEO Dr Ronald Walcott said the action was "distressing" for him and pointed out that the severance payments were generous at $365 million, almost four times the sum prescribed by industrial relations law. That, Walcott said, "gives us the comfort that people are not leaving here on the breadline, but with enough finance to start again."
With a wage bill of $768 million, a debt burden of $1.8 billion and an operating loss of $32 million annually, the telecoms boss was right to consider the company as being at an "inflection point." The company has been spending on projects that will change its profile as a provider of broadband and communications services locally, but it is operating in a market in which it is the sole local player in an environment dominated by multinational companies with much deeper pockets.
Last week, its rival in the mobile communications market, Digicel, announced a million-dollar winner in a running competition which also dispensed weekly gifts in tens of thousands of dollars. On Monday, Digicel plans to announce an even larger Christmas promotion that will directly challenge TSTT's presence in the local market. Flow, backed by Liberty Communications, is yet to offer a major challenge for wired market share, but that silence isn't going to last.
In announcing the retrenchment, the criteria for separating the junior and senior staff employees was organised on a last in-first out basis, which is surprising for a company that depends on deep technology knowledge in a fast-changing industry, capabilities that are more likely to be present in recent hires than in legacy employees. The company is also still to announce its strategy to trim its management profile, which tracks closely with its overstaffing generally, with investments in managerial capabilities that are irrelevant to its stated plans for transformation.
From a PR perspective, the company might have done better to start from the top, but it needs to begin somewhere, and having done so, it must follow through with an employee profile and strategy that's capable of executing the bold promises it's made to become a more commanding competitor in the local market.