Worry across region as Digicel gets ready to cut jobs to shave rising debt
BRIDGETOWN – Digicel triggered jitters across the Caribbean as it announced its plans to slash more than 1,500 jobs over the next 18 months in a bid to cut down its rising debt.
The cuts are expected to begin on Wednesday, affecting the company’s 6, 500 full-time employees, plus contractors and part-time workers in the Caribbean, Central America and in the Pacific.
The Irish-owned telecommunications group reported a six percent drop in revenue for September to December 2016 and said its debt had reached more than US$6 billion.
It blamed declining profits on currency weaknesses across several of its major markets, including Jamaica and Haiti.
The Irish Times reported that while earnings before interest, tax, depreciation and amortization rose one per cent to US$285 million on a constant-currency basis, they fell when earnings from Haiti, Jamaica and other markets were translated into US dollars. The Jamaican dollar has depreciated by 11 percent against the US dollar over the past two years, while the Haitian gourde has fallen more than 40 percent.
The company has made a commitment to reduce its debt ratio to 4.5 per cent by March 2018 and has announced new plans to achieve this.
The company said it would embark on a complete overhaul of its organizational structure dubbed Digicel 2030 transformation.
In a statement, Digicel Group Chief Executive Officer Colm Delves said: “We are building Digicel for 2030 and beyond. Our transformation programme sees us taking the bull by the horns and daring to be different by challenging the status quo and by innovation-led growth. That’s what we are known for and that’s what we will continue to be known for into the future.”
The plan will entail moving office functions scattered around its various markets to four regional hubs.
Digicel will also be revamping how it deals with customers, which could see the company abandoning the use of call centres and improved pricing.
The proposed changes have triggered mixed responses across the Caribbean.
Trinidad and Tobago’s Public Administration and Community Minister Maxie Cuffie says he will be meeting with Digicel officials “at the earliest opportunity” to discuss the implications for the twin island republic.
Secretary General of Communication Workers’ Union Joseph Remy who accused the company of being anti-union told the Trinidad Express that Digicel workers were being made the scapegoat for management’s poor decision to rack up billions of dollars in debt.
“Digicel has resisted unionization ever since its advent to the Caribbean. What is happening now is a direct result of that, and that is reason they have been resisting unionization, because they would want to continue to take these kinds of high-handed actions and lay off persons without any challenge whatsoever,” Remy charged.