UPDATE: Tech Pac axes senior staff

Tech Pacific, Australia's largest distributor, has retrenched four key senior personnel and 21 other staff this week as a result of its failed attempt to find a buyer last month.

David Cullen, Tech Pacific Australia's managing director, confirmed with ARN that director of categories David Henderson, marketing communications manager Fiona Stewart, networking and communications category manager David Higgins, and software category manager David Patnaik have been made redundant.

The 21 other staff were "spread across the business" in a shake-out that is designed to dramatically slash overheads in a tightening market.

"We have just brought together a couple of categories," Cullen said of the decision to reduce personnel. "It is a recognition of the economic environment and a recognition of the need to match revenues with operating costs. It is also my general view that at a senior level we were too top-heavy.

"There is a general slowdown in business. Everyone in the channel is experiencing it at the moment and our view is that the business will see a tough operating environment for the next nine months. We are just moving as early as possible to address what we are seeing in the marketplace."

The move has forced a management and departmental reshuffle at Tech Pacific, with Ann Mossman returning to the role of sales and marketing manager. The business has been consolidated into three categories - telecommunications, PCs and networking, and PSI (printers, supplies and imaging) - which will be managed by Liz Wolahan, Josh Velling and Lorraine Cowan, respectively.

Cullen denied the loss of four experienced staff would create holes in the Tech Pac management team. The redundancies will generate "significant" cost savings for the company, but Cullen refused to be drawn on exactly how much that would be.

"Ann Mossman has been with us for 15 years, running various parts of the business," Cullen said. "She has more experience than just about anyone in distribution in terms of sales and marketing. I think it is actually adding value to our business."

Cullen was confident no further redundancies would be required. "We would like to think that we have recognised where the business is at and reacted accordingly in terms of our headcount," he said. "But if economic conditions continue to deteriorate beyond our expectations, we would review the business again."

Cullen was also at pains to reassure resellers that there would be no drop-off in customer service. "We have made no changes in our face-to-face personnel who address customers," he said. "Our resources are focused on our customer base. We have essentially looked at the back end of our business."

Photograph: David Cullen