Tech services biz Allvotec furloughing staff, asking remainder – including top brass – to take pay cut
(2020/04/03)
- Reference: 1585905006
- News link: https://www.theregister.co.uk/2020/04/03/allvotec_furloughing/
- Source link:
Allvotec – the rebranded Daisy Partner Services business – is responding to the coronavirus crisis by furloughing a number of staff and asking all that remain to take a pay cut to avoid potential redundancies.
The reason for the move is obvious: Allvotec provides field service engineers to act on behalf of third-party resellers, MSPs or SIs that do not have the in-house resource themselves but whose customers need support. However, on-site IT work has been shelved in the current climate.
In an email to staff on 30 March see by The Reg , CEO Glen Williams spoke of the "extensive restrictions" across Britain that have "severely impacted our business, our clients, our partners and many others".
Conversations with those clients suggest there may be a "significant reduction in revenues", and Williams said it needs to act to "safeguard the future of our business and preserve as many jobs as possible for the duration of this pandemic".
The measures include furloughing "a number of roles that we would otherwise have had to make redundant". The second lever is to "ask all remaining employees to accept a reduction in their base salary of 20 per cent". Similar action is being take at subsidiaries in Ireland and Bulgaria.
Allvotec is far from the only business in Britain that is planning to furlough staff and rely on the government for support: thousands of businesses are doing the same thing including our friends at [1]Dixons Carphone , [2]Capita , certain Premier League football clubs, airlines, etc.
The [3]British Chamber of Commerce said yesterday that according to its own research, 44 per cent of businesses it surveyed expect to furlough at least one half of their staff next week.
Under the temporary measures of the [4]Coronavirus Job Retention Scheme , for at least three months all UK employers can claim for 80 per cent of furloughed staffs' monthly wages, up to £2,500 a month, along with Employer National Insurance contributions.
'Up to 300' UK heads to roll at Brit IT services firm Allvotec, with 200 jobs offshored to Bulgaria in cost-cutting drive [5]READ MORE
"These decisions have been extremely difficult to make but are necessary in the current climate to enable the business to thrive once our lives return to normal," said Williams.
Williams told The Reg the pay cut is voluntary and everyone at Allvotec, including management, were being asked to consider it, "for a period as long as we go through this challenging time. Including me."
"Every peer that I've spoken to is doing something similar to what we are doing." The pay will be reviewed when the crisis abates.
He refused to specify the number of staff being furloughed but said the business had little choice but to act.
Allvotec – which stands for "all voice and technology" – employed around 1,400 staff when it rebranded in June 2019, and turned over £100m in sales. Since then, it has bought ISG Technology, adding 170-odd more heads.
Last month, the company put [6]300 roles at risk of redundancy in the UK . In the memo distributed to staff at the time, Williams said the past few years had been "challenging from a business performance perspective".
He told us today the redundancies had "nothing to do with COVID-19", and that Allvotec inherited a service centre in Bulgaria via the ISG purchase and was "near-shoring" several hundred jobs.
In addition to the relocation, "tens" of engineers were likely to leave the business because the company deployed automation software, including dynamic scheduling tools, that made the workforce more "productive". ®
[1] https://www.theregister.co.uk/2020/03/26/dixons_covid_19_trading_update/
[2] https://www.theregister.co.uk/2020/03/27/capita_covid_19_market_update/
[3] https://www.britishchambers.org.uk/news/2020/04/bcc-coronavirus-business-impact-tracker
[4] https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme
[5] https://www.theregister.co.uk/2020/03/11/british_it_service_provider_to_cut_300_jobs_in_uk/
[6] https://www.theregister.co.uk/2020/03/11/british_it_service_provider_to_cut_300_jobs_in_uk/
The reason for the move is obvious: Allvotec provides field service engineers to act on behalf of third-party resellers, MSPs or SIs that do not have the in-house resource themselves but whose customers need support. However, on-site IT work has been shelved in the current climate.
In an email to staff on 30 March see by The Reg , CEO Glen Williams spoke of the "extensive restrictions" across Britain that have "severely impacted our business, our clients, our partners and many others".
Conversations with those clients suggest there may be a "significant reduction in revenues", and Williams said it needs to act to "safeguard the future of our business and preserve as many jobs as possible for the duration of this pandemic".
The measures include furloughing "a number of roles that we would otherwise have had to make redundant". The second lever is to "ask all remaining employees to accept a reduction in their base salary of 20 per cent". Similar action is being take at subsidiaries in Ireland and Bulgaria.
Allvotec is far from the only business in Britain that is planning to furlough staff and rely on the government for support: thousands of businesses are doing the same thing including our friends at [1]Dixons Carphone , [2]Capita , certain Premier League football clubs, airlines, etc.
The [3]British Chamber of Commerce said yesterday that according to its own research, 44 per cent of businesses it surveyed expect to furlough at least one half of their staff next week.
Under the temporary measures of the [4]Coronavirus Job Retention Scheme , for at least three months all UK employers can claim for 80 per cent of furloughed staffs' monthly wages, up to £2,500 a month, along with Employer National Insurance contributions.
'Up to 300' UK heads to roll at Brit IT services firm Allvotec, with 200 jobs offshored to Bulgaria in cost-cutting drive [5]READ MORE
"These decisions have been extremely difficult to make but are necessary in the current climate to enable the business to thrive once our lives return to normal," said Williams.
Williams told The Reg the pay cut is voluntary and everyone at Allvotec, including management, were being asked to consider it, "for a period as long as we go through this challenging time. Including me."
"Every peer that I've spoken to is doing something similar to what we are doing." The pay will be reviewed when the crisis abates.
He refused to specify the number of staff being furloughed but said the business had little choice but to act.
Allvotec – which stands for "all voice and technology" – employed around 1,400 staff when it rebranded in June 2019, and turned over £100m in sales. Since then, it has bought ISG Technology, adding 170-odd more heads.
Last month, the company put [6]300 roles at risk of redundancy in the UK . In the memo distributed to staff at the time, Williams said the past few years had been "challenging from a business performance perspective".
He told us today the redundancies had "nothing to do with COVID-19", and that Allvotec inherited a service centre in Bulgaria via the ISG purchase and was "near-shoring" several hundred jobs.
In addition to the relocation, "tens" of engineers were likely to leave the business because the company deployed automation software, including dynamic scheduling tools, that made the workforce more "productive". ®
[1] https://www.theregister.co.uk/2020/03/26/dixons_covid_19_trading_update/
[2] https://www.theregister.co.uk/2020/03/27/capita_covid_19_market_update/
[3] https://www.britishchambers.org.uk/news/2020/04/bcc-coronavirus-business-impact-tracker
[4] https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme
[5] https://www.theregister.co.uk/2020/03/11/british_it_service_provider_to_cut_300_jobs_in_uk/
[6] https://www.theregister.co.uk/2020/03/11/british_it_service_provider_to_cut_300_jobs_in_uk/
tfewster
Voluntary pay cuts are unlikely to work; A corollary to Parkinson's law is that expenditure expands to take all the money available, so few could "afford" to volunteer, and they'll resent those who "can't".
Employment law prohibits reducing a workers salary (citation needed?), but that could be temporarily rescinded by Parliament if there are appropriate safeguards and transparency, e.g. Directors are hit first and hardest. The decision makers (MPs and Directors) need to be seen to be leading the way on this.
And let's not forget shareholders - Ownership comes with some responsibilities, not just benefits. I own some shares though unit trusts (pension plans etc.) and I fully expect those shares value to be diluted if the companies need extra funding. Again, as long as it's transparent. No one should be getting rich though this crisis.
I'm also mentally prepared for taxes to rise, to cover welfare and economic costs.
TL;DR: I'm never going to be able to afford to retire.
Icon: PPE ----------->
Things are rather difficult for the services industry
And I, just like tens of thousands of others, am right in the middle of this.
Thankfully, my best client has given me a special VPN account so that I can still help them from home. Of course, once the crisis is over, I will lose that account. That's something I will regret.
Another client has notified me just yesterday that they are willing to send me a laptop via DHL so that I can help them as well.
I guess I'm rather lucky. On the other hand, being a freelance means I can't furlough myself, so it's all relative.