Sapura Technology Plans Layoffs To Reorganise

SHAREN KAUR and FRANCIS FERNANDEZ Nov 28

SAPURA Technology Bhd plans to cut as many as 400 jobs as part of a proposed business reorganisation plan, people familiar with the matter said yesterday.
Mail Money was told that early this month, Sapura had sent out letters to as many as 600 people within the company, including full time and contractual employees, of its intentions to trim staff strength.

A Sapura human resource officer confirmed the matter and Mail Money was provided copies of the letter by employees of the company.

The human resource officer, who didn’t want to be named, said the layoffs will be done in a gradual manner, and that execution of the plan will most likely start as early as next month.

The layoff will be mainly focused on the information and communication technology division (ICT), Mail Money was told.

Apart from the ICT division, the single largest revenue earner for Sapura is from the oil and gas business, namely from SapuraCrest Petroleum Bhd, its 59.97 per cent unit.

Sapura, formerly known as Sapura Telecommunications Bhd, had in May 2004, cut 202 jobs or 21 per cent of the unit’s work force via a voluntary separation scheme (VSS).

The VSS exercise had cost the company a one time full charge of RM10.5 million, Sapura’s chairman and dominant shareholder Tan Sri Shamsuddin Abdul Kadir said in the company’s 2005 annual report.

Although, Sapura made a net profit of RM25.5 million for the financial year ended Jan 31 2005, the ICT division had suffered a pre-tax loss of RM18.4 million during the said period, the company’s annual report show.

For the year in question, Sapura had net sales of RM1.7 billion, of which RM667.5 million was contributed by the ICT division.

The ICT division is expected to suffer losses in the current financial year, thus prompting the management to downsize its workforce.

For the six months ended July 31, 2005, Sapura’s ICT division posted a revenue of RM386.44 million, but it still suffered a loss of RM3.38 million, figures plucked from its unaudited half year financials posted on Bursa Malaysia’s web site show.