Feb 9, 2018
Everything you need to know about Shaw Communications' buyouts
By Tara Weber
As the number of Canadians cutting their cable cord continues to accelerate, telecommunications companies are moving away from their legacy offerings and bundles and being forced to change with the times. Shaw Communications is currently one of the largest cable providers in Canada. It also provides internet and cable services and in December of 2015, it entered the wireless market with the acquisition of WIND. Now, it’s undergoing what it calls a Total Business Transformation with changes it calls “intentionally disruptive” and “a revolution in how Shaw does business.”
On Jan. 31 Shaw (SJRb.TO) began offering voluntary buyouts to nearly half of its approximately 14,000 employees as part of a move to become a leaner, more digitally-focused organization. The 6,500 employees who received the offer have until Feb. 14 – Valentine’s Day – to decide if they’ll accept it.
At the time, President Jay Mehr called this a “one-time offer” designed to “motivate Shaw employees to think critically about their future with our company, and make realistic decisions about their role in Shaw’s evolution.” Shaw’s employees were warned even if they did not take the offer and chose to stay, the company could not guarantee the job they currently do, where they work or who they work with, would remain the same.
WHY SHAW IS DOING THIS
Shaw says the changes to the organization are the result of new technologies as well as changing expectations of customers. “People are increasingly choosing to not buy our industry’s legacy product offering, and people no longer want to interact with companies the way they used to—and this is especially true in our category,” Mehr said in a Jan. 30 email to staff.
This is a “critical opportunity to redefine all aspects of our operating model – from how we deliver products and services to how we manage our business,” Mehr told employees.
Shaw says it’s offering voluntary packages, as opposed to enacting layoffs, in order to allow employees to decide for themselves if they want to stay around through the “at times, uncomfortable” changes and be a part of the new Shaw. “We still want the best people to work at Shaw, but the way we define ‘best’ is shifting,” staff have been told. Shaw says it’s “actively creating a culture” of employees that are on board with the organizational changes taking place.
HOW MANY BUYOUTS IS SHAW TARGETING
Shaw said it expected 10 per cent, or 650, of the 6,500 workers would accept the offer. Shaw would not confirm exact numbers, but one week in so many employees had reportedly accepted the offer, that the company as asking some to reconsider their decision to leave. In a February 5th email to staff, Mehr says any employee who had submitted a decision would be allowed to “re-assess” and change it before the deadline.
Mehr said the company had received “valuable feedback” and was encouraging staff to attend the company’s Town Hall sessions and ask questions. This email took a much more upbeat tone than the previous message with Mehr telling staff: “We are confident you’ll find the future of Shaw an exciting place to be.” He explains the buyout packages are not a matter of reducing numbers or saving money, but rather a way to ensure that moving forward, Shaw employees who remained are those who had made that deliberate choice as the company undergoes massive changes.
Shaw’s staffing reductions should save the company between $40-50 million annually and are a “prudent and expected move,” said TD Securities analyst Vince Valentini in a note to clients. However, if the cuts go deeper than the 650 planned reductions, the results could “be disruptive to both operations and company morale,” he warns.
WHAT SHAW IS OFFERING EMPLOYEES?
Shaw says it’s offering a “generous severance package” that includes six-months pay plus a month of additional pay for every year of service using the highest of 2017 earnings or an average of the last three years. These packages would be capped at 30-months of eligible earnings. All offers are non-negotiable.
WHO IS ELIGIBLE?
All employees are eligible, except unionized employees or “customer-facing” employees, such as those in retail, sales, and customer care as well as their direct leaders. The company says this is in order to “limit disruption” to customers and the company’s business obligations. Employees who on temporary-term contracts or those with less than six months of tenure as of Feb. 14, 2018 are also ineligible.
WHEN IS THE DEADLINE?
Eligible employees have until 11:59 pm on Feb. 14 to make a decision. Those employees will receive departure details and payment by Apr. 6, 2018. The employees’ departures will roll out over the following year and a half. Shaw says the exact dates of those leaving will be based on customer and business need. Until then, employees will “be required to maintain a satisfactory level of performance expectations, up to and including their final date of employment with Shaw in order to receive the package.”
WHAT WILL THE NEW SHAW LOOK LIKE?
Shaw says the new company will be “digital by default both internally and externally.” It is moving to integrate the many silos and divisions of the company into a single, streamlined operating model that is data-driven and requires fewer employees.
The company hopes these structural changes will reduce the amount of duplication within the organization and change the volume of work that needs to be done by its staff. Shaw says it will be will reviewing workloads done by departing employees to determine how it will be done in the future. It will then “be distributed, eliminated, outsourced, or digitized.”
For customers, what this means is getting Shaw services through online and smartphone apps. It also means more “self-installed services” with the help of agents in call centres. The company says this will better suit customers’ preferences in getting the service how, and when, they want it.
