Prepare for massive job cuts at TSTT, CWU says
Claims by Chairman of the Telecommunications Services of Trinidad and Tobago Limited (TSTT), Robert Mayers regarding profits made by the company in the past financial year is laying the foundation for massive retrenchment to come.
That’s the view of the Communications Workers’ Union, which believes that the company is building a case for massive layoffs.
The majority state owned telecommunications provider recorded an after tax profit of $8.5 million for 2018, while for the same period the previous year, noted a $48.5 million profit.
The TSTT Chairman said the company suffered a number of challenges, with its greatest challenge being employee costs which now exceed $700 million or 40 percent of total costs (compared to an industry average of 25% percent).
In response to what the Union views as an open and bold attack on the workers of TSTT, it said to suggest or even hint that the blame for TSTT's inability to increase their profit margin is on account of its employees, is not only being “deliberately provocative but also patently dishonest”.
“What Mr. Mayers willfully failed to take into account is that the Junior and Senior Staff workers of TSTT have not gotten an effective increase in salary since January 1, 2014. For some time, TSTT's bargaining unit employees have been working on 2013 salaries.
Additionally, the number of workers in the bargaining unit has been steadily declining while the number of consultants (foreign and local), professionals, managers, senior managers and Executive Vice President positions has been constantly increasing.”
The Union said the workers have been left “extremely angry and fuming” by the Chairman’s “attack”.
Rejecting the suggestion that employee costs factored heavily into the Company's current negative financial position, the Union also took issue with Mayers’ reference to TSTT's financial position as 'positive'. The CWU described the affair as an attempt to insult the intelligence of sound and proper minded citizens.
“The fact is TSTT's declared profits moved from $548.5 million at the end of the last financial year to $8 million dollars at the end of this financial year. This represents a 79 % decrease in profits year on year. In fact; that TSTT was able to declare a profit, as small as it is, can only be attributed to the hard work, dedication, commitment and duty of the workers of TSTT.”
Picking apart the Chairman’s report, the CWU turned its attention to the acquisition of Massy Communications (now Amplia Communications) calling it “an absolutely horrible investment deal.”
The Union said Mayers neglected to address the acquisition of a Company that has failed to make a profit since its inception.
“So horrible was the investment that the now renamed Amplia Communications Limited, has proven to be a burden on TSTT's operations resulting in the loss of millions of dollars and negatively impacting on TSTT's bottom line. While he attempted to dance around the issue, his endeavour was at the very best pathetic.
What Mr. Mayers should have further addressed in his report was that the decision to close down all TSTT's Retail stores in Trinidad wasn't only idiotic and asinine but has now manifested itself in the negative returns for the company. It is clear that having experienced extremely high levels of dissatisfaction, customers decided to switch their service from TSTT.”
The CWU believes that the removal of the personal touch with customers in the closure of TSTT’s retail stores has more to do with the declines noted in its financial report than employee costs.
And, it believes that the current financial position will only worsen if the situation remains unaddressed by TSTT.
The Union suggested that the heavy burden of costs came from the company’s employment of consultants, professionals, managers, senior managers, Executive Vice Presidents and the CEO's salary as some of those payments are made in US currency.
It said bargaining unit staff is paid in TT currency and have not received any bonuses.
“The Union had asked the question and we got no answer, so we will ask the Chairman once more; is it true that the Executive Management of TSTT received around $10 million in bonus at the end of 2017, with the CEO alone getting 52 million?” the CWU questioned.
The Union said it is not surprised by the telecoms company’s actions and expressed concerns that workers would be axed in the near future.
“What is clear to us is that the Company is laying a foundation and building a case for a massive retrenchment to come. The plan seems to be to possibly close down TSTT and to absorb it into the operations of Amplia Communications Limited and in the process not pay the workers one red five cent.”
Recalling the performance of the company, the Union noted that there have been declines in profit over the last three years under Mayers’ stewardship.
“Imagine that TSTT was your Company and in September 2014 you appointed a new Chief Executive Officer to take the company forward. His performance revealed the following: April 2015 to March 2016 $316 million loss April 2016 to March 2017 $48.5 million profit April 2017 to March 2018 $8 million profit
Will you continue to leave him in charge of your Company? NB TSTT belongs to you and every citizen of Trinidad and Tobago! It's your move Mr. Mayers!”
TSTT performance 'positive'
Major investments throughout the period resulted in a TT$48 million or 90 percent increase in financing costs and a 27 percent increase in depreciation and amortization costs of TT$106 million year on year.
The ‘positive’ bottom line, TSTT Chairman Robert Mayers noted in his Chairman’s report, included a one-off $41 million ‘bargain goodwill’ resulting from the acquisition of Massy Communications Limited (now Amplia Communications Limited).
As a result, the gross profit margin increased from 79 percent to 83 percent, but, at the same time, gross profit decreased by 5 percent.
The figures are based on audited financial statements for the year ended March 31, 2018.
TSTT is 51 percent owned by the Government through an investment holding company, National Enterprises Limited (NEL).
The sharp decline in TSTT’s profits may erode NEL’s financial results, as expected pick-up in natural gas production and revenues from the other holding companies – NGC and NGL, would be tempered owing to the erosion in TSTT’s bottom-line.
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