On January 29th, Shaw employees received a surprising internal memo from the company’s president, Jay Mehr.
In the memo, Mehr wrote that Shaw was volunteering to buy out 6,500 employees, or an estimated 46 percent of the company’s current workforce. According to a subsequent press statement, Shaw expects 10 percent of those employees to take the offer, and is giving them until Valentine’s Day to decide.
Most long-term employees are used to the company trimming jobs every few years, but this was unprecedented for Shaw.
One long-term employee who works for the company in a non-customer facing role and who spoke to MobileSyrup anonymously said the current mood at Shaw is “grim.”
After calling fellow employees at other offices, the source notes the mood is lowest in offices in smaller communities, like Nanaimo, British Columbia, where there’s less job opportunity than hubs like Vancouver or Shaw’s HQ in Calgary.
“Once these jobs are gone… they do not come back,” said Lee Riggs, national president of the United Steelworkers (USW) Telecommunications Workers Union, which represents some Shaw and Freedom employees, adding: “We were blindsided by this information.”
Employees weigh options
The employee MobileSyrup spoke with added that the company might have more takers for its buyout offer than expected. Their own “conservative estimate,” based on conversations with fellow employees, is 25 percent. Another long-term employee says they’re sure the number of takers will be higher at their location too, unless the company gives employees more information about their future.
According to MobileSyrup‘s sources, USW and other Shaw employees on internet forums, Shaw’s offer is six months’ compensation, plus one month per year of service up to 30 months. According to the sources, the payment is a lump sum, delivered after the employee’s last day, which is decided by Shaw and non-negotiable.
The general opinion, say the sources, is that it’s better to get a good buyout package than wait for involuntary layoffs. Both are considering taking the package themselves.
The massive scale of the buyouts come as a surprise, but the recent shutdown of the Windsor, Ontario, Freedom Mobile call center gave an indication that the telecom was interested in trimming its expenses through staff cuts. The closure affected 130 workers.
At the time, USW protested the decision, calling it an “unjustified attack.”
According to Shaw, the Windsor shutdown was a step towards integrating Freedom Mobile into its larger operation following its acquisition of the carrier, finalized in the spring of 2016.
“As we reinvent our customer delivery model to be more digital, online or e-care, we’re very pleased to offer generous packages to our team members.”
The voluntary buyouts announcement, however, shed new light on the situation, as the cuts apply to both Shaw and Freedom Mobile workers.
Shaw is positioning the buyouts as an essential part of a larger “total business transformation initiative.”
“As we reinvent our customer delivery model to be more digital, online or e-care, we’re very pleased to offer generous packages to our team members throughout the organization who have built this company,” said Mehr in a statement to the press.
In this, Shaw and Freedom Mobile’s new strategy matches up with how Telus has run Public Mobile, which only offers online support to new customers, and recently announced that it would raise the price of its services for all Legacy/Pioneer customers with access to the company’s call centre.
However, many of the employees commenting in online forums, as well as our sources and their colleagues, work in non-customer-facing roles, such as IT or equipment installation.
A different sort of restructuring
Tony Olvet, group vice-president of research at analysis firm IDC Canada, suggests the restructuring may be the result of financial pressure.
“Shaw needs to do everything it can to remain competitive versus the big three,” Olvet told MobileSyrup via email. “But this is not an easy task, as customers demand a lot, while wireless carriers recognize the importance of long term business success and profitability.”
Over the past year or so alone, Shaw has launched and developed Freedom’s 4G network, overhauled its plan offerings and began selling brand new iPhones for the first time, but the carrier’s path hasn’t been unimpeded. Telus, Rogers and Bell all participated in a December 2017 $ 60/10GB promo blitz that caused “record disconnects,” which will be reflected in the company’s Q2 2018 financial results.
Shaw has been extremely vocal about its wireless ambitions over the past year. In June 2017, Mehr said Shaw wants “millions and millions and millions” of Freedom Mobile subscribers. The carrier currently stands at 1,147,173 subscribers, according to its last earning report figures.
Further indicating its strong interest in wireless, Shaw registered Shaw Mobile, Shaw Mobility and Shaw Wireless trademarks in September 2017. More recently, Shaw became the only Canadian representative on the board of 5G Americas, an industry body dedicated to the next generation of wireless technology.
Next steps and employee concerns
Still, both of MobileSyrup’s internal sources say they wonder if the buyouts relate to something larger than appeasing shareholders as wireless costs grow or losing jobs to digitization.
One says they’ve weathered about five or six of these periods of job loss in their time with Shaw, but never before have they experienced a restructuring quite like this.
The scope of the buyouts is far vaster than any restructuring in the past, causing them to speculate about a larger change, like the company outsourcing customer care (which it currently does not do) or a change in leadership.
The latter idea, the source says, was further stoked by Mehr sending the memo rather than CEO Brad Shaw, who is generally the author of company-wide memos.
“Jim Shaw just passed away, and they’re quite a tight-knit family, so I’m wondering whether Brad is going to step back,” said the source.
“The company will need to balance ‘choice’ and ‘value,’ while being ‘sustainable.’”
Regardless of the reasoning behind the restructuring, Olvet says Shaw will need to maintain a high level of customer service if it wants to see continued success in building its presence in the Canadian telecom market.
“Canadian consumers won’t expect any less after today’s announcement, and I don’t expect Shaw to change its tune with respect to the importance of customer experience. To use Shaw CEO’s terms mentioned in its latest quarterly release, the company will need to balance ‘choice’ and ‘value,’ while being ‘sustainable,’” wrote Olvet in an email to MobileSyrup.
More information will reportedly roll out over the remainder of the week. Employees are receiving information packages in their emails today, and information sessions are scheduled throughout the rest of the week.
In the meantime, sources say, it’s difficult to make a decision on whether or not to continue with the company
“It certainly makes it difficult to make a good decision as most people don’t have the financial security to make a decision to stay on vague info and uncertain outlooks,” says one source.
“I would say there is not a lot of trust if one stays […] for the company to reward that loyalty.”
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