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Feb 15, 2018

Shaw says 25% of employees took buyout offer, sees $450M charge

Your Money Month: Assessing an employer's buyout offer

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Shaw Communications got more takers than it expected for its voluntary buyout program.

The Calgary-based telecommunications company disclosed Thursday that 3,300 employees accepted the buyout offer. That works out to approximately 25 per cent of the company's total headcount.

"The actual uptake falls within scenarios considered and therefore we expect the business to continue to operate in the normal course with no impact on customer experience," said Shaw President Jay Mehr in a press release.

“We made the difficult but necessary decision to modernize our wireline and satellite businesses by offering a generous package to those people who helped us build Shaw and chose not to join us in this transformative period of growth,” he added.  

When the buyout program was publicly disclosed in late January, Shaw said 6,500 of its employees would be eligible for the program and that it was expecting around 10 per cent to accept the package.

The Takeaway with Amanda Lang: How Shaw's buyout plan backfired

BNN's Amanda Lang tells us the reasons why Shaw Communications had to backpedal hard on a buyout plan as employees hit the deadline to accept it.

According to an internal document obtained by BNN, the buyout package offers employees six months' pay, plus an additional month for each year of employment, up to a limit of 30 months' pay.

Shaw said Thursday it expects to take a $450-million restructuring charge in the second quarter, and that it is targeting $225 million in annual cost savings as a result of the buyout program in fiscal 2020.

“In our view, this is a very bold transition strategy and one that will come with higher than average implementation risk (known unknown),” wrote Macquarie Capital Markets Canada Analyst in a report to clients. “However, we see it as forward thinking, in that the industry is moving from multiple products toward one product (wireless/wireline broadband) with multiple associated applications.”

Shaw also announced on Thursday its chief financial officer, Vito Culmone, is being replaced in May by Chief Strategy and Business Development Officer Trevor English.

“We have made bold decisions to reposition Shaw for growth and recognized that, in parallel with this transformation, Shaw will require a leaner, more integrated and agile workforce,” Culmone said in a press release.“I congratulate Trevor on his appointment and have no doubt that both he and Shaw will be successful."