Major South African software developer slashing jobs

South African software development company Derivco is retrenching hundreds of workers as part of a broader restructuring process.

MyBroadband initially learnt of the development through a source close to the matter, which disclosed that many employees were served with Section 189 notices signed by Derivco CEO Quraish Behari on 6 August 2024.

MyBroadband has seen a copy of one of these letters.

Behari explained that the company’s current operating model did not support Derivco’s “purpose, vision, and goals”.

“To stay relevant and secure our future, we need to change how we operate,” Behari stated.

Behari said the company was developing a new target operating model to modernise the business and run it efficiently.

He explained this process would require “clear accountabilities and aligned skills.”

“Despite numerous attempts to rectify the situation, we still face inefficiencies and challenges, leading to this proposed action,” Behari said.

“As part of our strategic restructure, we might need to retrench some positions.”

Behari stated that the potential number of positions that would be affected was 38. According to the letter, the company employed 1,124 employees in South Africa.

Derivco subsequently confirmed that it had sent letters to over 500 people across all operations, notifying them that their roles may potentially be affected by the process.

“We are currently in the initial consultation phase of the Section 189 process in South Africa,” it stated.

“The restructure is a global process and is being conducted within the guidelines of respective local labour practices.”

“Depending on the outcome of the consultation and placement processes, we anticipate that fewer than 300 people globally will ultimately exit the business,” Derivco said.

The company said it could not confirm the specific roles that were affected due to the requirements of the process.

However, the company said its restructuring would require new skills, meaning “many” new opportunities would become available in due course.

The source also directed MyBroadband to Derivco South Africa’s review page on the jobs platform Glassdoor to learn more about staff reactions.

One disgruntled person claiming to be a software engineering manager at the company said it was laying off “hundreds of people”.

Multiple users posting reviews in the past month complained about poor or indecisive management.

Nevertheless, the company still had a moderately good overall rating of 3.5/5, with multiple other users recently reporting a good experience working for or interacting with the company.

MyBroadband found over a dozen people on LinkedIn who recently changed their status to “Open for Work” with their most recent or current employer being Derivco.

At least six were based in Durban, and several of these employees were software engineers.

The other recent or current Derivco employees who had also switched their status were from Australia, the US, and the Isle of Man.

Overseas operations also impacted

Derivco develops e-gaming content and offers software development services for the sports betting industry.

The company started out in Durban in 1996 and gradually grew to expand its offices to Australia, Isle of Man, Malta, Spain, Sweden, UK, and the US.

In addition to the 1,600 South African employees it claims to have on its LinkedIn page, it has 400 workers in its overseas operations.

Manx Radio and Isle of Man Today have received feedback from Derivco’s Isle of Man offices.

Manx Radio published parts of a company statement explaining the reasons behind the retrenchments. The statement’s wording was similar to that of the letter sent to employees in South Africa.

“To achieve its goals Derivco is considering a new operating model designed to better serve customers and create additional value,” the letter stated.

“As part of this transition, the company is contemplating a redundancy process that may result in job terminations. No final decisions have been made and we are currently consulting with our employees,” it continued.

“Despite numerous efforts to address inefficiencies our current model does not fully support our objectives.

“We believe that a new operating model, aimed at modernising the business, will accelerate growth and innovation.”