Cell C is retrenching staff, but it says its financial position has not deteriorated
Cell C plans to close 128 retail stores and cut 546 jobs, but the company said this is not because of a worsening financial position.
Cell C told MyBroadband it has expanded its Section 189 retrenchment process to include its retail footprint, which encompasses around 240 stores in total.
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.
Cell C said it anticipates 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.
What stood out about the plan to close stores is that Cell C CEO Douglas Craigie Stevenson previously said these stores were one of the company’s biggest assets.
Stevenson said in September 2019 Cell C has four major assets which it could leverage to improve its financial position:
- Valuable mobile spectrum
- A large customer base
- A wide distribution network which includes over 240 stores
- A valuable brand
Last year Cell C lost 2.83 million subscribers, which means its subscriber base shrunk by 16%.
With the operator planning to close 128 retail stores, its retail presence will shrink by over 50%.
Two of Cell C’s four major assets listed by Craigie Stevenson have therefore taken a serious knock, raising questions about the company’s financial position.
Cell C downplayed the significance of the latest announcement, saying its financial position has not deteriorated.
Instead, Cell C said the retail environment has significantly changed since the comments by its CEO in September last year.
“The economic recession has deepened, COVID-19 has had an impact particularly at a store level and consumer’s buying habits have changed,” Cell C said.
“Cell C is embracing digital solutions and moving closer to its vision to be a customer champion with innovative service offerings.”
Cell C subscriber numbers
Cell C financial performance
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