BCX, a wholly-owned subsidiary of the Telkom Group, has announced its intention to implement a new operating model following its analysis into the impact of changes within the ICT landscape, evolving customer demands and the drastic downturn of industries key to its business, brought on by the Covid-19 pandemic.
As a result, the group has issued a section 189 notice to unions which is likely to result in retrenchments.
Jonas Bogoshi, chief executive officer at BCX, said: “The ICT landscape is changing rapidly, and customer demand is evolving at a faster pace, it was important for BCX to consider whether its current model still enables it to deliver on the changes in the market, especially when Covid-19 remains a long- term financial threat to our clients and therefore BCX.”
“As leaders, it is our responsibility to address the requirements of the next-generation digital world, whilst balancing the immediate financial challenges presented by COVID-19.”
He said that Covid-19 created immense financial pressure, forcing the company to review its position. “Covid-19 has had disastrous consequences for our economy, and its impact to our clients has been substantial,” Bogoshi said.
Bogoshi indicated that customer expectations were rapidly changing prior to Covid-19, however the financial constraints experienced as a result of the lockdown became evident.
BCX, Bogoshi said, had identified client’s inability to meet financial responsibilities, received increased requests for payment options, identified a reduction in clients IT spend and reprioritising of business requirements as some of the challenges.
“This created further pressure on BCX margins and on our ability to generate revenue.”
“Due to the implementation of the new operating model as a result of changing market conditions, structural changes were inevitable,” Bogoshi said. BCX served the Section 189 notice to Unions and the CCMA in accordance with the Labour Relations Act.
“This is not an easy decision for any management team to make and is never taken as a first line decision. There were various measures implemented to try and mitigate this,” the chief executive said.
BCX considered the issuing of the section 189 notice to Unions, following adjustment to its business strategy, the implementation of cost cutting measures, a reduction in discretionary spend, measures to increase business efficiencies, and by reducing business complexity.
“Unfortunately, these measures could not insulate us from the rapidly changing ICT landscape, changes in customer demand and the devasting impact of Covid-19,” said Bogoshi.
BCX has informed its employees of the decision at a meeting on Thursday (15 October). “Our main priority is to support our employees over the next few months, as we go through this process together.”