Daisy Group, the corporate telecoms supplier, plans to cut 300 jobs and relocate a further 150 positions from to Lancashire from the south east as it gears up for further acquisitions in 2010.
Matthew Riley, Daisy chief executive, said that the workforce will be cut from 1,150 in August to 850 at the end of March but that the level of job losses is 450 as the projected total includes 150 new positions at it’s headquarters in Nelson.
The job losses follow Daisy’s acquisition of rivals AT Communications, Eurotel and Redstone over recent months as it closes offices of the companies it has acquired in Halifax and in London and moves customer accounts onto its own systems.
Mr Riley said that hiring a sales and customer service agent in Lancashire costs half as much as doing so in London while office rent is 90 per cent lower than in the southeast.
The company has also identified cost savings in unexpected areas after discovering that AT, which it bought out of administration, had an office in Miami. “Why a UK telecoms company would need an office there I don’t know. Perhaps it was a holiday home,” Mr Riley said.
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Daisy has also decided to sell the WiMax broadband and wifi operations it acquired as part of its reverse takeover of Freedom4 this year which could attact bids of up to £20 million from the likes of BT, Cable & Wireless and mobile operators including Vodafone according to the company. Intel Capital, which holds a stake in the WiMAX business, may also be an acquirer although analysts expect a trade buyer to emerge.
Daisy expects to restart its acquisitions next year after integrating the companies it has purchased by the end of March. Mr Riley said that there are still 600 voice resellers and 1,000 data resellers in the UK providing a substantial opportunity to acquire rivals. “People ring me up on a weekly basis looking to exit companies. I don’t know how they get my mobile number,” he laughed.
Daisy, which is chaired by Peter Dubens who built the Pipex broadband business up largely via acquisition, expects to acquire companies that report a profit between £1 million and £30 million. Analysts said that a range of rivals, including Spiritel, Maintel and BNS Telecoms may be on its radar.
FinnCap analyst Andrew Darley said that in time, Daisy will undoubtedly become a telecoms force but remains concerned about demotivation amongst employees after a 26 per cent cut to the workforce.