Cell C to close 128 retail stores and cut 546 jobs

Cell C plans to close 128 of its retail stores and cut 546 jobs as part of its ongoing turnaround strategy.

The network operator told MyBroadband it has expanded its Section 189 retrenchment process to include its retail footprint, which encompasses around 240 stores in total.

“Part of Cell C’s turnaround strategy includes evolving its business strategy and operating model in order to run a more efficient and competitive business that is aligned to customer needs and behaviours,” Cell C said.

“It is anticipated that 128 stores will be closed over a period of time and this will affect 546 positions.”

The retrenchment consultation process started on 30 July 2020 and the company has subsequently made a voluntary severance package offer to impacted employees.

“The process is still underway and no final decisions have been taken,” Cell C said.

The original Section 189 process was initially announced back in June, when Cell C indicated a total of 960 jobs within its junior management and semi-skilled staff complement would be affected.

This followed a restructuring of its senior management earlier in 2020 which saw 30 employees retrenched.

Fast-tracked by COVID-19

Cell C said COVID-19 has fast-tracked a change in the retail environment and impacted the purchasing habits of consumers.

It will therefore be working on “new digital ways of engaging and servicing customers based on customer insights”.

“Much like banks are moving away from brick and mortar branches, Cell C is embracing digital solutions and driving digital inclusion by leveraging collaborations and partnerships and moving closer to its vision to be a customer champion with innovative service offerings,” Cell C said.

Workers want answers – Union

Information Communication Technology Union (ICTU) spokesman Thabang Mothelo told MyBroadband that it has asked Cell C management to address staff about the planned retrenchments.

“On 17 August, ICTU has written to the Cell C CEO requesting him to address workers… on identified thorny issues for transparency and understanding the direction of the company,” said Mothelo.

“Workers are concerned that other parties have been very vocal on public platforms about Cell C and their strategy, without workers being informed.”

He said the issues include the recapitalization of Cell C and how its details are “being kept a secret”.

Cell C’s strategy going forward is also not known by the employees and the union, he said.

Defaulting on payments

Cell C announced in early August that it was unable to make debt repayments, raising concerns among industry players about the future of the company.

Cell C defaulted on the payment of capital on its $184-million note which was due on 2 August 2020.

Cell C also defaulted on interest and capital repayments on loan facilities with Nedbank, China Development Bank Corporation, Development Bank of Southern Africa Limited, and Industrial and Commercial Bank of China Limited, which were due in January and July 2020.

Cell C said it was working with stakeholders to improve its liquidity, debt profile, and long-term competitiveness as part of its turnaround strategy.

Now read: Cell C’s future – What industry players and analysts say

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Cell C to close 128 retail stores and cut 546 jobs