Datatec subsidiary Westcon SA is mulling job cuts, following a knock to the company’s revenue over the last few months.
Westcon SA CEO Jacques Malherbe says: “The jury is still out on whether we will be retrenching Westcon SA employees; we are hoping that the new cost structures and our investment into our data centre practice will allow us to retain staff.”
According to Malherbe, like many other corporates in SA, Westcon has seen declining revenues in “certain business sectors”. However, he adds that the company has started to implement counter-measures in the hopes of holding onto staff and improving business.
He explains that part of Westcon’s strategy, to beat the economic downturn, is to grow specialist skills and products into the data centre market. “Through the combined efforts of investment in certain areas, and scaling back in others, Westcon SA is projecting both top and bottom line growth for the coming financial year.”
According to Datatec’s trading statement last week, Westcon’s second half year will show even weaker performance than the first half. “Westcon has continued to align its cost base to the slower market conditions, and will enter the new financial year starting 1 March 2009 with a much lower operating cost base than that of the prior year.”
Datatec has expected the slowdown in Westcon’s growth for some time. The company noted the possibility of slowed margins at its financial year-end last year. Datatec is also predicting troubled times for its business.
Last year, it put a hold on hiring staff in light of the tough economic situation. However, its most recent trading statement indicates the company is maintaining rather than sinking.
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