UPDATE: Tech Pac cuts 83 staff

UPDATE: Tech Pac cuts 83 staff

Tech Pacific, Australia's largest IT distributor, has laid off 83 staff as part of a 'right-sizing' initiative that will see its call centre operation decentralised from its Sydney head office.

The cuts were made across all business units according to David Cullen, Tech Pac managing director, and represent about 11 per cent of its total workforce. However, the restructuring has opened a further 51 positions nationwide, many of which will be taken by the recent retrenchees.

Taking this into account, Cullen says 5 per cent is a more realistic representation of the cuts.

"From our point of view [the restructure] is fine tuning," Cullen said. "It's a matter of reacting early so if things do get worse we're in a position to handle it."

The changes are part of a major review of Tech Pac's business processes, admittedly bought on by the current market slowdown. Cullen feels decentralising call centre support will provide a higher level of service for customers at a branch level rather than from Sydney.

Cullen appeased the market mildly by saying that any rise in resellers fees or charges would not be due to Tech Pac but, more likely the cost of purchasing in US dollars and a generally struggling economy.

The company will continue to review its business processes for the next few weeks, with specific areas of concern being order values and the money draining go-to-market system. Tech Pac will be "encouraging" resellers to consolidate purchasing and is desperately trying to raise the bar on small orders to maintain high volume box-movement.

Cullen said many invoices are requesting less than $1000 worth of products per month while there is a large number of resellers placing 10 individual orders a day.

"Realistically, if a VAR can't order $1000 worth of products a month, you've got to ask wether they're really a VAR," he said. "We're being treated sometimes as a retailer and we're not actually a retailer. You can never make a margin on a $70 order.... It costs $50 to raise a $70 order."

The distributor is still bandying around solutions to convert this behaviour into larger, less frequent orders. Cullen says the response from partners to this move has so far been positive.

"It's not that we don't want to deal with the small orders," says Cullen. "We're just finding a better way to deal with them."

Photograph: David Cullen, managing director Tech Pacific

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