The Gov­ern­ment of T&T will not be pro­vid­ing a loan guar­an­tee to the Telecom­mu­ni­ca­tions Ser­vices of T&T (TSTT) for the $427 mil­lion it has bor­rowed to pay sev­er­ance to re­trenched work­ers. This means that tax­pay­ers are in­su­lat­ed from the re­struc­tur­ing ex­er­cise, Pub­lic Util­i­ties Min­is­ter Mar­vin Gon­za­les has said.

Gon­za­les con­firmed the loan fig­ure and said that TSTT has ap­proached lo­cal banks and fi­nan­cial in­sti­tu­tions for fi­nanc­ing to as­sist in shoul­der­ing the cost of the sev­er­ance pack­ages and was giv­en six years to re­pay.

Fol­low­ing Tues­day's an­nounce­ment that 468 work­ers had re­ceived re­trench­ment no­tices ef­fec­tive June 1, as it com­menced a re­struc­tur­ing ex­er­cise, Guardian Me­dia spoke to Gon­za­les about the job cuts and the fu­ture of the state-owned com­pa­ny.

The min­is­ter said if TSTT fails to take de­ci­sive ac­tion, the coun­try's largest telecom­mu­ni­ca­tions provider will be forced to close its doors by the end of the year and all of its work­ers will be sent home.

Has TSTT se­cured a loan to pay TSTT's re­trenched work­ers?

MG: TSTT is not re­ly­ing on the Gov­ern­ment to pay sev­er­ance pack­ages to its em­ploy­ees. As a mat­ter of fact, it will not cost the Gov­ern­ment one cent. It will cost TSTT in­stead, as the com­pa­ny has ap­proached lo­cal banks and fi­nan­cial in­sti­tu­tions for loans to as­sist in shoul­der­ing the cost of the sev­er­ance pack­ages. TSTT se­cured these loans on their own and the Gov­ern­ment has not even pro­vid­ed a loan guar­an­tee to TSTT. So the tax­pay­ers' cof­fers are in­su­lat­ed from this re­struc­tur­ing ex­er­cise. TSTT is not sup­port­ed by sub­ven­tions from the State like WASA. If TSTT is not re­struc­tured at this point in time, then, it ei­ther clos­es its doors or it would per­haps have to go on the navel string of the Gov­ern­ment to be sup­port­ed by a state sub­ven­tion. Cer­tain­ly, the Gov­ern­ment is not in a po­si­tion to in­clude an­oth­er state com­pa­ny to sup­port it via state sub­ven­tions. It just can­not hap­pen.

Will TSTT stand on its own and bear its bur­dens and fi­nan­cial oblig­a­tions for its sur­vival?

 Ab­solute­ly cor­rect! TSTT has to be run like a busi­ness. It was nev­er a bur­den on the State. TSTT found it­self in a po­si­tion where in or­der for it to re­main alive and a go­ing con­cern, with­out hav­ing to shut its doors, has to re­pur­pose it­self to re­main afloat. If we don't do that, the en­tire com­pa­ny is go­ing to col­lapse and all of its em­ploy­ees will be out of a job as op­posed to 468 em­ploy­ees be­ing re­trenched.

What is the val­ue of these loans and with­in what time frame TSTT was giv­en to re­pay these loans?

The loans to­talled $427 mil­lion and TSTT was giv­en six years to re­pay.

Will this $427 mil­lion be suf­fi­cient to pay the work­ers?

Yes, we did our cal­cu­la­tions.

Can you say if TSTT work­ers are the high­est paid in the pub­lic util­i­ty sec­tor and some of its high-lev­el staff will go home with hefty sev­er­ance pack­ages?

The in­for­ma­tion I have is that on av­er­age every em­ploy­ee would get be­tween $700,000 to $800,000 in their sev­er­ance pack­age. I don't have what is the low­est or high­est some­one will go home with. This is a mid­dle-range fig­ure. Those pack­ages would have been cal­cu­lat­ed based on the Re­trench­ment and Sev­er­ance Ben­e­fits Act. The sev­er­ance would pro­vide a good cush­ion to keep these em­ploy­ees and their fam­i­lies afloat un­til they get em­ploy­ment in oth­er sec­tors of the econ­o­my. As you would agree, it is a tidy amount and it would pro­vide the nec­es­sary pro­tec­tion to the af­fect­ed em­ploy­ees.

If TSTT saves these 468 jobs what could be the like­ly out­come for the state-owned com­pa­ny?

TSTT would have to fold up...it will col­lapse. If TSTT is un­able to pro­ceed with the re­struc­tur­ing ex­er­cise that is hap­pen­ing now, its ex­ter­nal au­di­tors will au­dit TSTT on a liq­ui­dat­ed ba­sis. This is go­ing to have cat­a­stroph­ic im­pli­ca­tions for the com­mer­cial vi­a­bil­i­ty of the com­pa­ny and it will un­like­ly be able to con­tin­ue in busi­ness. If the com­pa­ny does not re­struc­ture it will face a liq­ui­da­tion with­in two to three months and close its door by the end of the year. That means there will be more job dis­place­ment. We have to make de­ci­sions that are for the greater good of the coun­try.

What is TSTT's cur­rent work­force?

About 1,400. With the re­struc­tur­ing, it comes down to about 1,100 work­ers. TSTT's com­peti­tors op­er­ate with about 700 staff per com­pa­ny.

You are be­ing seen as the hatch­et man in this re­struc­tur­ing, what is your take on this?

I am not the hatch­et man. As Min­is­ter of Pub­lic Util­i­ties, I have to en­sure T&TEC, TSTT, TTPOST and WASA's lev­els of ser­vice are not im­pact­ed. They have to re­tool and re­struc­ture in or­der to meet the de­mands of a very anx­ious and 'pa­tience less' pop­u­la­tion where rev­enues are de­clin­ing and de­mand for bet­ter ser­vice con­tin­ues to climb.

So you have to bite the bul­let?

That is the chal­ice that was passed to me and I would have to sip from that chal­ice for the ben­e­fit of our cit­i­zens.

 What were some of the tough de­ci­sions TSTT had to make with this re­struc­tur­ing ex­er­cise?

Man­age­ment, work­ing in tan­dem with the Board, ex­e­cut­ed two phas­es. Now we are go­ing to the third phase with staff ra­tio­nal­i­sa­tion. The two phas­es fo­cused on non-per­son­al costs with the im­ple­men­ta­tion of aus­ter­i­ty mea­sures. In the first phase, TSTT was able to save $124.3 mil­lion in op­er­a­tional ex­pens­es. In phase two the costs were re­duced by $159.8 mil­lion. The on­ly op­tion that was avail­able to TSTT with the pos­si­bil­i­ty of re­duc­ing op­er­a­tional costs was per­son­al costs. TSTT's em­ploy­ee costs stood at 23 per cent com­pared to lo­cal and in­ter­na­tion­al com­peti­tors which ranged be­tween sev­en to 12 per cent. It sug­gests that TSTT's em­ploy­ee costs were way out of the ac­cept­able mar­gin. The rev­enue TSTT has been mak­ing was be­ing gob­bled up by the amount of mon­ey it was ex­pend­ing on em­ploy­ee costs. There­fore, TSTT did not have enough mon­ey to in­vest in tech­nol­o­gy to be­come com­pet­i­tive. If we al­low TSTT to con­tin­ue in this way the qual­i­ty of its ser­vice will con­tin­ue to fall. In or­der for TSTT to be­come com­pet­i­tive, in­vest in tech­nol­o­gy and im­prove its ser­vices to cus­tomers it had to make some dras­tic de­ci­sions to re­struc­ture.

What is the fig­ure for TSTT's month­ly salaries and wage bill?

 It is $31.1 mil­lion. So the sav­ings in em­ploy­ee ex­pens­es af­ter the re­struc­tur­ing would be $14.1 mil­lion a month.

How much mon­ey TSTT is ex­pect­ed to save with its staff ra­tio­nal­i­sa­tion?

The com­pa­ny is ex­pect­ed to save $307.8 mil­lion on em­ploy­ee costs for this cur­rent fi­nan­cial year. Our em­ploy­ee costs are three times that of com­peti­tors. TSTT has been haem­or­rhag­ing be­cause of these costs. The com­pa­ny found it­self in a bind.

Fol­low­ing the re­trench­ment ex­er­cise, will TSTT call up­on its re­main­ing staff to un­der­take ad­di­tion­al du­ties?

No, once you in­vest in tech­nol­o­gy there is no need for that. As a mat­ter of fact, tech­nol­o­gy makes it eas­i­er to do the work and stay ahead of the game.

Why is TSTT's prof­it lev­el con­tin­u­ing to plum­met?

The glob­al pan­dem­ic con­tributed to TSTT los­ing a lot of its rev­enue. Then cus­tomers moved from voice calls to us­ing apps like What­sApp and Google Duo and the price of da­ta al­so fell dra­mat­i­cal­ly. Al­so, lo­cal­ly fixed calls de­clined from $550 mil­lion to $200 mil­lion. This is a drop of 64 per cent. And be­cause of that, the com­pa­ny lost al­most $400 mil­lion in rev­enue in the last two to three years forc­ing the com­pa­ny to make some crit­i­cal changes. TSTT could no longer main­tain its op­er­a­tional costs as it was do­ing be­fore. We have to run a lean­er op­er­a­tion and pro­vide bet­ter ser­vice to its cus­tomers. That is the rea­son why they have so many dis­en­chant­ed cus­tomers at TSTT.

Did TSTT make bad de­ci­sions in the past that are now af­fect­ing its op­er­a­tions and fi­nances to­day?

I have noth­ing to sug­gest that TSTT made a bad de­ci­sion that cost the com­pa­ny. I do know for a fact some­time be­fore 2020 it had en­tered in­to a con­tract with the Na­tion­al Se­cu­ri­ty Min­istry for a cam­era sys­tem...se­cu­ri­ty cam­eras to be de­ployed and the com­pa­ny did not get the rev­enues ex­pect­ed from that in­vest­ment.

Is TSTT fear­ful of sab­o­tage from re­trenched work­ers?

Now that there is an in­junc­tion some of the em­ploy­ees who were served re­trench­ment no­tices, now that they are al­lowed to come back in­to the com­pa­ny...the com­pa­ny re­gards it as be­ing in a very volatile po­si­tion be­cause some of these em­ploy­ees, per­haps, could be in a po­si­tion where they could cause some sab­o­tage on the com­pa­ny's op­er­a­tions. So it is not the best thing, I guess. It is a de­ci­sion of the court that TSTT and its lawyers will have to deal with.

 Fol­low­ing the re­struc­tur­ing, will TSTT in­crease its rates?

I don't see any ev­i­dence of TSTT look­ing to in­crease its rates. What I am see­ing is af­ter this re­struc­tur­ing, based on the in­for­ma­tion I have at my dis­pos­al, it might be not too far from now the com­pa­ny would be re­turn­ing to full prof­itabil­i­ty? I think TSTT will sur­vive.

What's next for TSTT af­ter the re­trench­ment?

 To grow TSTT's mar­ket share, ex­pand its dig­i­tal foot­print, in­vest fur­ther in tech­nol­o­gy and be the lead­ing telecom­mu­ni­ca­tions provider in T&T. The com­pa­ny has to re­pur­pose it­self.

What is your view that these af­fect­ed work­ers will no longer be pay­ing tax­es, health sur­charges and NIS con­tri­bu­tions, caus­ing a loss of rev­enue for the Gov­ern­ment?

400 peo­ple no longer con­tribut­ing to the NIS pen­sion fund will have an im­pact.

How many of TSTT's se­cu­ri­ty of­fi­cers have re­ceived re­trench­ment no­tices? And is it true that the com­pa­ny will re­tain the ser­vice of a pri­vate se­cu­ri­ty firm to pro­tect the com­pa­ny's as­sets?

Yes, 27 of its se­cu­ri­ty of­fi­cers were served with re­trench­ment no­tices. We are go­ing to main­tain a small per­cent­age of its in­ter­nal se­cu­ri­ty. We will not be hir­ing any se­cu­ri­ty firm. With tech­nol­o­gy, we will have se­cu­ri­ty alarm sys­tems and vir­tu­al mon­i­tor­ing so there will be less need for se­cu­ri­ty of­fi­cers.

What are your per­son­al feel­ings re­gard­ing this re­trench­ment?

I am con­cerned about the work­ers who would ob­vi­ous­ly be stressed by this dif­fi­cult time in the evo­lu­tion of the com­pa­ny...the un­cer­tain­ty that will face them be­cause it is not that you will walk out of a job to­day and walk in­to an­oth­er job the next day. I hon­est­ly and sin­cere­ly feel it for those em­ploy­ees who have been im­pact­ed by this re­struc­tur­ing ex­er­cise. I want to en­cour­age them to make use of the sev­er­ance pack­age that will be paid to them. Don't squan­der it, seek fi­nan­cial ad­vice from their bankers and ex­am­ine ways they can in­vest. They can al­so use a por­tion of the mon­ey to re­tool and get new skills so they can be rein­te­grat­ed in­to the oth­er sec­tors of the econ­o­my. I am en­cour­ag­ing work­ers who would re­ceive a hefty sum in their pack­ages to in­vest in the agri­cul­ture sec­tor to earn a liv­ing for them­selves and their fam­i­lies.