Redundancies loom as Inabox ramps up restructure

Australian telecommunications provider Inabox Group is making a number of roles across its business redundant as it accelerates its restructuring plan.

The company, listed on the Australian Securities Exchange (ASX), told shareholders in a statement (PDF) on Tuesday that it is moving to implement an "enhanced restructuring plan" in a bid to drive savings after its acquisition in January of former rival Anittel.

Inabox said that since the acquisition, it has identified "substantial synergies" across all of its businesses, which include Telcoinabox, iVox, Neural Networks, and Anittel.

The "synergies" are expected to generate additional total annualised cost savings of approximately AU$3 million. The company said that it plans to draw cost savings by making changes to "surplus leased premises, duplicated back-office and administration services, and overlapping roles, which will become redundant".

Inabox Group CEO and managing director Damian Kay said that the roles to be made redundant are varied, and will be drawn from across all the company's businesses.

"The roles are across both Anittel and the original business; across the whole organisation," Kay told ZDNet. "A number of different roles that were duplicated will be included, such as heads of product and general roles across the organisation.

"There are a substantial number of people that have been notified. But we've created more roles than we've made redundant," he said.

According to a shareholder presentation (PDF), Inabox Group took on 130 new staff members as part of its Anittel acquisition, which was worth a total of AU$9.88 million in shares, cash, and deferred cash.

Although Kay is remaining tight lipped about the number of redundancies the company expects to make, he said that Inabox Group will begin advertising newly created roles from April onwards, to which existing employees who are being made redundant can apply.

"If they're not successful, those people will begin leaving April and June," said Kay.

The company told shareholders that the changes it is making are expected to enhance its operating and sales capabilities without impacting its operations, and will be implemented during the second half of the financial year ending July 2015.

As a result, the half will include significant non-recurring restructuring and transaction costs associated with the acquisition of Anittel, the company said.

From the estimated AU$3 million in savings that the changes will bring, Inabox will reinvest around AU$1 million to support new sales and growth initiatives, including adding more sales staff.

Kay said that he hopes the changes the company is putting in place will help it "hit the ground running" by the time the financial year ending July 2016 arrives.

"I am confident that our new structure will lead to a stronger, more profitable combined business in FY16," said Kay. "I am also encouraged that cross-selling has just generated the first AU$1 million-plus order for Anittel from a lead generated by another division of our business.

"We expect cross-selling will accelerate as Anittel is further integrated into the group," he said. "Anittel had never really been a profitable business, and that's what we're working to turn around."