Gijima to axe more staff
Eileen Wilton, the interim CEO at ICT Group, Gijima, says that the troubled group will look to cut additional staff as part of an ongoing right-sizing initiative.
On Monday (30 September), Gijima reported a R210.76 million loss for year ended June 2013, from a prior loss of R50.59 million in 2012.
The group said that the loss of two significant contracts that expired after several years of delivery in the previous financial year, a tough market and significant top-line pressure on a major project, contributed to a challenging financial year.
Revenue from continuing operations declined to R1.848 billion, from R2.22 billion, with an operating loss from continued operations at R335.6 million, from R72.1 million in 2012.
Speaking at the group’s results presentation in Sandton, Wilton said that Gijima had culled 500 of its workforce in the year ended June 2013, including 91 retrenchments.
This excludes 350 staff who were part of mining and technology consulting firm, MineRP, which Gijima sold in the reporting period.
The group has seen its staff decline by about a third, from 3,000, to 2,000 over the past year.
“We have driven costs out of the organisation,” said Wilton. “We exited a number of contractors…we dealt with a number of non-performers,” she said, noting that that the company’s costs are predominantly from its people – two thirds.
She added that the contractor to permanent staff mix is approximately 70/30.
The company lead said that, in September, the company would have reduced its monthly costs by as much as R20 million, due to staff cuts, and its knock-on effect.
Speaking to BusinessTech, Wilton said that right sizing of the business was not concluded with further cuts expected, “although much smaller”.
Looking ahead, Gijima pointed to a R4 billion pipeline, and an order book of R3 billion.
Wilton said that the company has implemented a new business development unit to drive new revenue generation.
“Gijima has renewed all its major long-term annuity contracts with key clients whose contracts became renewable during the period under review,” Wilton said.
The CEO said that the group had agreed an R800 million, five-year contract renewal with a major organisation, while another big firm in the mining industry with a market cap of R79 billion had also agreed to a contract, indefinitely.
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