February 20, 2009
Dodd: Layoff was difficult but necessary

The decision by Landline Internet Mobile Entertainment (LIME) (formerly Cable & Wireless) to layoff 1,200 of its workforce around the region was difficult, but necessary, the company’s Chief Executive Officer insists.{{more}}

At a media luncheon last Thursday at the Grenadine House Hotel, CEO Richard Dodd said that the business model of LIME was not fit to meet the challenges that the company faces these days, considering the liberalization of the telecommunications market.

Dodd said that in the past the company has been guilty of trying to just “throw people” at the challenges they faced, rather than concentrating on truly improving productivity and the quality of service that they provide.

“We have for too long been consistently inconsistent in the way we deliver service across the region,” he said quite frankly, as he admitted LIME’s frequent failure to deliver on its promises and meet the needs of its customers.

Comparing LIME to an old house on which floors have been built upon over the years, Dodd said that the company reached a place where a complete overhaul was needed at the US$1 billion company.

He said that in light of the layoffs, coupled with increased productivity, investments, and an aggressive push towards consistently excellent public service, the company is now well positioned to face the challenges that the market throws at it.

As to whether or not the laying off of workers was a last resort for the company in its restructuring, Dodd said no! He said that from the beginning of the process it was accepting that downsizing was a necessary part of the restructuring plan.

He explained that 40 percent of LIME’s revenue goes to cost, of which one half of the 40 percent goes to employees. He said that the overall model made it impossible for them to compete.

“We could not hope or ever think of reaching our cost objective and our competitive position without addressing headcount,” he said.

He also brushed aside any concerns about the value of Cable & Wireless’ Caribbean operations to its shareholders, saying that the region’s operation is profitable.

LIME’s Executive Vice President for the Windward Islands Sutcliffe Hodge said that the company is currently making approximately US$300 million in profit annually, of which US$150 million is directly reinvested into the operations.

LIME has committed to invest US$400 million in the region over the next three years, even as they brace for the impact of the global financial meltdown that is taking place.

When asked to address the perception that LIME did not operate in the most ethical way in dealing with competition, Dodd admitted when DIGICEL entered the market in Jamaica in 2001, signaling the beginning of the end of LIME’s monopoly in the region, they were not prepared!

“Any Monopoly finds it difficult to adapt to a new environment that is a natural human reaction… It is on record that we were not particularly prepared for the arrival of competition,” he asserted.

Hodge affirmed that they have begun and will continue to engage in an aggressive marketing campaign, not only to retain the customer base and get new customers but also to win back those who have left the company.

“Certainly there are some customers out there who have lost confidence in us along the way and we intend to welcome them back home,’ he said.

While unwilling to say what is LIME’s market-share throughout the region, the company’s brass will only say that LIME is holding its own.