By NEIL HARTNELL
Tribune Business Editor
Cable Bahamas' top executive yesterday admitted that hopes the COVID-19 crisis would "be short term" have been dashed as it permanently terminated 87 staff.
Franklyn Butler, its president and chief executive, told Tribune Business that the pandemic's "harsh reality" meant the BISX-listed communications provider had no choice but to "right-size to survive" given "growing" challenges in collecting revenues due from customers.
The move, which cuts the combined workforce at Cable Bahamas and its Aliv mobile affiliate by 11.5 percent, is effectively turning the 96 temporary lay-offs unveiled in early April when COVID-19 first struck into permanent separations.
The terminations, 60 of which fall on the Cable Bahamas side, and the remaining 27 at Aliv, largely involve those already furloughed. Cable Bahamas' workforce will drop from 574 to 514, a 10.5 percent drop, while Aliv's is to reduce from 181 to 154 - a 15 percent drop. Combined, staffing levels will fall from 755 to 668, with more than one in ten workers affected.
Revealing that COVID-19 has had its most significant impact on Cable Bahamas' largest clients, namely hotels and other businesses in the tourism/hospitality sector, Mr Butler said the approaching end-July deadline at which furloughed workers either have to be re-engaged or permanently separated had influenced the timing.
While there were no plans for further permanent terminations, he added that the BISX-listed communications provider will constantly monitor the situation and further downsizing may be possible if the economic crisis unleashed by COVID-19 is "further protracted" and there is no recovery.
Describing the situation as "fluid", Mr Butler said he was especially "sensitive" to the fact that the terminated workers will find it hard to obtain new jobs in a labour market suffering from a huge over-supply of available workers as a result of an unemployment rate estimated to be between 30 percent to 40 percent.
And, while declining to provide figures on the extent of Cable Bahamas' revenue decline and accounts receivables increase, he said the communications provider was enduring the same COVID-induced challenges as other "utilities" such as Bahamas Power & Light (BPL) and Water & Sewerage Corporation - although not to the same extent.
"We thought it would be short-term," Mr Butler told Tribune Business of the COVID-19 crisis. "This is the end of the 13-week period coming up, so most of those people - not everybody - will be a part of the lay-offs.
"It's just one where we're trying to right-size to make sure we can survive what is a very difficult environment to be in. We're trying to be judicious in these things. These are people's lives; they have been great contributors to the organisation, and it's never easy to make these decisions."
Those impacted are primarily the 76 staff at Cable Bahamas, and 20 at Aliv, who were placed on the National Insurance Board's (NIB) temporary unemployment benefit scheme when the COVID-19 crisis first hit.
Most persons impacted then came from the two providers' sales and retail departments, and Mr Butler confirmed that these two areas will also bear the brunt of the permanent separations given that there is little new business to be won in the depressed economy.
"I don't know what the official unemployment number is, but we are already seeing an impact to our collections and have been trying to manage it as best we can," he said.
"This [the terminations] is unfortunately one of the ways we have to reduce costs in a very difficult environment. This is one that I was particularly sensitive to, as these people aren't going to go anywhere.
"This was not an easy thing to do at all. It's different in a boom time, when the hotels and hospitality industry are hiring, but those people will have to stay at home as the entire country and world grapples with what COVID-19 means."
Mr Butler revealed that "unprecedented economic uncertainty", especially over the timing and extent of the tourism industry recovery, had played a key factor in Cable Bahamas' decision to cut costs in line with anticipations of reduced top-line income for months, if not years, to come.
"This is very fluid," he added. "Three weeks ago we thought that Atlantis would be open by now and we would have tourists coming in for July 4. That didn't work out. That didn't decrease the uncertainty. It increased the uncertainty over where the tourism product would be in the next six months.
"If we don't see employment come back in a significant way we're going to have deeper structural issues as a country. With employment, it gives people the ability to spend and use credit. You think about the banks and mortgages. We don't want a repeat of 2008-2009 when we had all those bank foreclosures."
Noting the spike on COVID-19 infections in the US, and especially in key tourism source markets such as Florida, Mr Butler said: "From where the country is we have the ability to weather the storm, but the biggest thing is getting to a degree of recovery."
He added that while there were no further plans for staff terminations, Cable Bahamas would continue to monitor the financial impact from COVID-19. He warned that further action may be warranted "if this thing gets further protracted and there's no recovery.
"There's no plan for additional redundancies, but COVID is very fluid, and we don't know what will happen three, four or six months down the road," Mr Butler reiterated.
He added that Cable Bahamas had felt the "biggest impact", in terms of customers reducing or discontinuing cable TV, Internet, fixed-line and mobile services, in the tourism/hotel industry and also among small and medium-sized enterprises (SMEs).
"We are obviously anxious to get the economy open, but in a safe and sustainable way," Mr Butler added. "We are trying to work with as many SMEs as possible to get them back to normality and support them through this process.
"That's our challenge, and we're trying to work with customers as much as possible to see how we can work with them. It's one where there's a certain reality we cannot get away from. Simply, we had to ‘rightsize’ our operations and implement these stringent measures as part of our overall plan to address it.”
John Gomez, Cable Bahamas' chief operating officer, added: "The executive team are working very closely to ensure we optimise our retained resources and deliver the best possible service to our customers despite the challenges and changes.
"There is much work yet to be done to drive further economies of scale and we remain committed to our customers despite the unprecedented challenge we are all facing.”