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Feb 5, 2018

Shaw seeks to reassure staff after strong response to buyout program

Shaw receiving more buyout acceptances than expected

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Shaw Communications is trying to reassure employees about the future of the company – and the possibility of mass layoffs – after receiving a stronger-than-expected response to the voluntary buyout package it unveiled last week, BNN has learned.

The cable and telecom company revealed last Tuesday it was offering buyouts to about 6,500 employees, as part of what Shaw called a “total business transformation.”

At the time, Shaw said it expected about 10 per cent of workers to accept the offer.

However, the response has already surpassed that estimate, and Shaw has been asking some employees to reconsider their decision, sources tell BNN’s Tara Weber.

The buyout acceptances so far include many staff who have been employed by Shaw for more than a decade, one source said.

Chethan Lakshman, Shaw’s vice president of external affairs, declined to comment on the number of buyout offers that have been accepted so far nor whether the company is asking some employees to reconsider their decision to leave.

However, in a memo to staff on Monday, Shaw President Jay Mehr appeared to change his tone about Shaw’s future.

“We are confident you’ll find the future of Shaw an exciting place to be, and you’ll have the information you need to make a personal choice,” Mehr said in the memo obtained by BNN.

Mehr added that while Shaw may require further restructuring measures after the completion of its buyout program, “we can guarantee that there will not be mass layoffs during this multi-year Total Business Transformation.”

Individuals laid off after the buyout program will be offered a package similar to the current buyout offer, Mehr said.

That contrasts to Mehr’s comments when the buyout program was first announced in a Jan. 29 memo to Shaw employees, in which he called the severance package a “one-time offer” designed to push staff to “make realistic decisions about their role in Shaw’s evolution.”

Employees are being offered six months plus one additional month for every year of service as part of the buyout package, according to an internal document obtained by BNN. The pay will be distributed at either the higher of either the employee’s 2017 earnings or an average of the employee’s earnings over the last three years and will be capped at a maximum of 30 months.

Eligible employees have until Feb. 14 to decide whether they accept the severance package and leave the company.

Lakshman confirmed Shaw is holding a country-wide town hall for employees on Tuesday that is “part of our planned communications for the rollout” of the buyout program and restructuring initiative.

A reduction of Shaw’s estimated 650 employees would allow the company to reduce costs by about $40 million to $50 million a year, according to TD Securities analysts Vince Valentini and Bentley Cross. 

However, a higher number of staff reductions would be “disruptive to both operations and company morale,” Valentini and Cross said in the note. 

With files from BNN’s Tara Weber