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Johannesburg - Business Connexion (BCX) [JSE:BCX] Deputy CEO Vanessa Olver has clarified that the retrenchment of 31 employees in the technology company is not aimed at a full-scale general cost-cutting programme, but is a normal business operational move.
On Wednesday, Fin24 reported that BCX has become the latest high-profile local ICT firm to plan to reduce jobs, joining Telkom [JSE:TKG] and MTN [JSE:MTN] in seeking to cut costs by retrenching its employees.
Read: BCX joins Telkom, MTN in cutting jobs
But on Thursday in an emailed response, Olver said BCX is not engaged in a general cost-cutting programme.
“Any recent job losses, such as the 31 jobs referred to in the previous article, are as a result of addressing normal business operational requirements,” she said. “The retrenchments affect employees at all levels within the organisation and not management positions specifically.”
The company, which is listed on the JSE with a market value of R2.6bn, said that it has endeavoured to minimise the regrettable impact of potential retrenchments. “We will assist with outplacements within the Group for the affected employees should this be required,” said the company.
Meanwhile Telkom, which is cutting costs, is in the process of buying BCX for R2.7bn. In terms of the offer Telkom will acquire, for cash, 100% of the BCX share capital by means of a scheme of arrangement at a price per share of R6.60, representing a total cash consideration to BCX shareholders of about R2.7bn.
Read: Will Telkom’s R2.7bn BCX bid make the grade?
Last month BCX investors voted overwhelmingly in favour of the deal, and are now awaiting approval from communications watchdog Icasa and competition authorities.
Read: Business Connexion approves Telkom takeover
Telkom is chasing BCX to bulk up its information and communications technology business to address the technology and communication needs of South African businesses nationally.
If the proposed deal is accepted by BCX shareholders and receives various regulatory nods, BCX will be delisted on the JSE.
The JSE has already granted BCX approvals for the termination of its listing, provided the proposed deal becomes unconditional.
However, Telkom is involved in a process to cut costs and planning to shave off R1bn in costs every year for the next five years. As part of its cost-cutting exercise, it is targeting to reduce the size of its management through retrenchments.
- Fin24
