Nearly 2 200 MultiChoice employees have been served with retrenchment letters, as the broadcaster plans for a business “realignment”.
Employees were informed of the decision on Friday by MultiChoice Group chief executive Calvo Mawela. The 2194 employees affected by the restructure come from MultiChoice’s customer care (call centre) and walk-in centre.
MultiChoice, which competes with Netflix in online streaming via Showmax, said in a statement it is launching a consultation process to cut 2,194 positions in MultiChoice South Africa’s customer care call centers and walk-in centers.
“This has not been an easy decision to make but, in a business driven by advancing technologies, we must continue to drive efficiencies yet be agile enough to adapt to evolving customer needs,” MultiChoice Group Chief Executive Calvo Mawela said.
“We must act decisively to align to the change in customer behavior and competition from over-the-top services,” he added, referring to video services that stream directly over the internet.
“If we don’t reposition now, we run the risk of being completely misaligned and we put everyone’s jobs at risk.”
Under the Labour Relations Act, the consultation process will take 60 days.
Over the past three years, MultiChoice has seen a steady decline in the number of customer telephone calls and e-mails into its call centers and walk-ins to its customer service centers, the company said.
In contrast, self-service digital channels have continued to grow, now accounting for 70% of all its customer service contacts.
“The company is also in an environment where it will rely more on technology than people,” it said.
Job cuts are politically sensitive in South Africa, where the unemployment rate is more than 27 percent.
In his state of the nation address on Thursday, President Cyril Ramaphosa called the unemployment rate among the youth a “national crisis” that demands urgent, innovative and coordinated solutions.
MultiChoice said it will make new roles available for multi-skilled workers with the “expertise, skills and technological prowess to enhance the customer experience”.
As part of a support program agreed with unions and other employee representatives, the firm will offer voluntary severance packages, wellness support and financial planning, it said.
It will also continue paying for the current studies of MultiChoice bursary-funded employees, and some other benefits.
However the Information Communication and Technology Union (ICTU) said in a statement it had not been officially informed of the action, “which makes the process unlawful”.
“The employer has timed Friday to make announcement, which shows some cowardice tendencies of not dealing with the consequences of their actions,” it said, adding that it will seek an urgent engagement with MultiChoice.
Shares in the company closed nearly 2% stronger at 134 rand prior to the announcement.