Z-Tel reduces work force
By By RYAN CARTER
A focus on profitability has led Z-Tel to a reduction in its overall employment by 400 or more by the end of the March.
Thirty two positions were eliminated in Atmore last week.
In a statement released Wednesday, Z-Tel president and chief executive officer Gregg Smith said, "It's no secret to anyone that the marketplace and stock market are only rewarding companies with healthy balance sheets and rapidly growing, yet efficient operations. As a result, we are focused on the profitability of our operations and on proving to the market that we're here for the long haul. We believe this focus will make us an even better and stronger company than we are today."
According to Smith's statement, the plan to improve operational efficiency will include reducing the company's provisioning group from 380 to approximately 175 and the combined staffing levels in customer repair and customer service will be decreased from approximately 600 employees to 450. Smith said Z-Tel expects to reach those levels through normal employee attrition and one or more forced reductions.
According to president of consumer services Jim Corman, the actions taken by Z-Tel are a reflection of two factors:
The first being a reduction in the pace at which the company sells its products. Corman said by growing more slowly the company will be able to focus on generating quality customers. According to Corman, the investment community wants companies to perserve cash. Slower growth would allow Z-Tel to do this by retaining more of its customer base.
The second factor is recent software enhancements which have created several operating efficiencies.
"We are in a situation of growing at a slower pace and introducing three new processes that allow more work with fewer people," Corman said.
Corman said Z-Tel has been in a hiring freeze since January.
"Attrition has not been adequate to lower our total employment on its own, especially after we introduced the new software," he said. "As people are leaving in all nine of our locations across the country, we are not replacing them. We've been allowing our numbers to gradually come down. The improvements and efficiencies were so dramatic attrition couldn't keep up."
The new software introduced by Z-Tel will allow employees to do more for the customer. "This should make the positions more fun and more challenging," Corman said. "We are empowering our employees to do more for our customers."
According to Corman, the company expects to be hiring again in customer service possibly by the end of March.
"When we start hiring again, we are going to give those effected by the reduction first option at rehire," he said.
When asked if this reduction in employment is an indication that things are bad at Z-Tel, Corman said "No its not." He stated the reductions will make the company stronger in the long-term.
Of the reductions made last week, 32 employees in Atmore were laid off.
"Thirty one of the 32 employees where were in order processing," he said. "Order processing had the greatest decrease."
Corman said he does not expect another lay off in Atmore.
In the statement released by Smith, he stated that in addition to the workforce reductions, Z-Tel is considering changes in geographical location of certain departments.
According to Corman, the company is looking at putting a larger number of their customer repair and customer assistance positions in Atmore. This would require moving some jobs from their Tampa location. In addition to that move, the company is looking at moving its provisioning department from Atmore to Tampa.
"We are trying to align it so that the bulk of our employees [in one department] are in one location," Corman said.
Corman said he did not want to discourage people from applying for positions with Z-Tel because the company fully expects to be hiring again soon.