STATE telecoms company TSTT has retrenched 51 non-unionised staff members, less than a month after cutting 503 people – one-third– of its employees.
In a release today, the company added that, via an out-of-court settlement, 77 workers eligible for voluntary separation packages (VSEP) offered in 2014 were "facilitated" and allowed to resign. These employees were previously denied their request for separation as a result of an injunction lodged at the Industrial Court.
TSTT said the cuts would result in $207 million annual savings, bringing the company in line with employee benchmark costs, or 15 per cent of revenue. Before the cuts, it was 30 per cent.
The company added it "envisages" no salary increases for 2014-2018. The cost-cutting, one of the measures the company claims will make it more efficient, will allow TSTT to increase its revenue earnings from US$177,000 per worker to earnings more in line with the industry trend of US$400,000 per worker.
During the first tranche of cuts, the company justified its decision in the context of its profitability. Last year it recorded an operating loss of $32.5 million and in the first six months of the current financial year, it recorded a $478.8 million loss. TSTT’s financial year runs from April to March.
Its annual wage bill is $768 million, of which emoluments to junior and senior staff comprise 82.3 per cent. The company is also carrying a debt burden of $1.8 billion, of which 40 per cent (or about $700 million) pertains to the settlement of back pay to junior and senior staff.
TSTT CEO Dr Ronald Walcott said in the release that this “organisational transformation" is an absolute necessity for TSTT’s survival.
"We had to make these very difficult decisions to ensure that TSTT continues to fulfil its mandate to provide ubiquitous and affordable leading-edge solutions for the people of TT,” he said.
He said "digital disruptors" were affecting operations and profitability throughout the industry, and companies around the world were transforming their business models, and TSTT was no different.
"We have been forced to reconfigure the business to become an agile broadband communications company in order to compete in the telecom space. We have a thorough understanding of our competitive advantage and the path towards sustained profitability, while ensuring an adequate return on investment for our shareholders,” he said.
He said the company's focus was on "enhanced customer service," including the continued roll-out of new technology, such as 4G LTE for mobile and residential services and, subject to regulatory approval, is ready to deploy next generation 5G technology in 2019.