The company had last week announced its plan to sell off the Code Division Multiple Access (CDMA) arm of the business due to continued losses being incurred despite the cost reduction measures which were recently taken by the management of the company.
The company would however retain its corporate services division (lease line which is used to power Automated Teller Machine (ATM) connectivity and its corporate internet service).
The CDMA Arm employs about 750 workers in the 28 states where Multilinks operates including Abuja. THISDAY exclusively gathered that 650 may lose their jobs although the management plans to pay severance packages to them.
Workers of the CDMA arm are already jittery with the fear of being thrown into Nigeria’s already saturated labour market.
A source who spoke to THISDAY on condition of anonymity said the management is yet disclosed its exit plans for the workers which has created a lot of suspense and tension among the staff.
“We have heard that only about a 100 people would be retained, while others would be let go and paid off. But we do not know how much they would pay and what criteria they would use for the payment. Also remember that this is Nigeria, where they would continue to promise to pay severance packages for months, and refuse to do so” the source said.
The source blamed the huge loss incurred by the company on mismanagement, failure to woo customers through incentives and the huge amount of expenses spent to keep the high number of expat staff in good comfort.
“They have many expatriates on their staff which requires a lot of money. Some of them are not even as competent as Nigerians. The management was also employing the operational style of their company in South Africa which is not applicable to the Nigerian business environment.
Multilinks Corporate Head/Senior Manager of Northern Region, Mr. Justin Damsa when contacted by THISDAY on telephone said the fate of the workers would depend on who the new investor is.
He admitted that there would be a level of impact on the staff adding that Multilinks was working with relevant regulatory agencies to minimize the effect of the sale.
“Already local and foreign firms are expressing their interest to purchase the CDMA Arm. If the new investor is a new entrant into the Nigerian market, it may decide to keep the staff and even employ more to launch itself. However if we are purchased by a firm that is already in the Nigerian market, some people may be let go” he said.
Damsa emphasized that the situation would be clearer in the next couple of weeks.
Minister of Labour & Productivity, Chief Chukwuemeka Wogu told THISDAY on telephone on Monday that the ministry is not yet aware of the impending sack.
“...but this is a serious issue and when it is brought to our attention, we would do something about it”, he said.
Some business analysts have said although Multilinks was one of the first CDMA operators to enter the Nigerian market, it failed to reduce its prices when other operators were doing so to gain more customers. The company can however be said to have some of the best equipments which ensure good service delivery to their subscribers.
While other operators of CDMA were reducing subscription costs due to high competition in the marker and preference for GSM, Multilinks continued to charge its customers for receiving calls. Customers were also charged for moving their landlines from one part of the city to another, or from one state to another state.
By the time Telkoms purchased it for $410m three years ago, it was already over $130m in debt and has since racked up losses of over $97.3m (according to newspaper reports).
The company’s spokesman, Vincent Raseroka had last week issued a statement saying the decision to quit Nigeria’s CDMA market was purely based on business strategy as it is “...financially and commercially challenging for us to continue to do business in this segment. With a current market share of 2.6 per cent in a market dominated by the GSM technology, it has become imperative that we explore other options and chart a new path to growth and profitability for ourselves as a business by utilising our fixed infrastructure here in Nigeria. Additionally, a number of onerous contracts have rendered Multi-Links Telkom's CDMA business unprofitable and unsustainable."
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