Jobs go as Tait scales back development

Tait Communications plans to axe up to 60 staff in a bid to save costs of $10 million.

The move comes a year after it cut 74 jobs.

The company has been in discussions with affected staff.

It also might not move into its new building, instead leasing it to a tenant to bring in extra revenue.

Tait employs around 600 staff in Christchurch and another 220 overseas.

The company said it was scaling back product development and concentrating on new sales of its digital radio communications systems.

Up to 60 workers, many in the engineering and supply chain side of the business, will likely be made redundant, the Christchurch- based company said.

The business manufactures radio communication handsets, bases and networks for utilities and public agencies, such as police forces.

Tait is now looking at other cost-cutting measures including the possible leasing or sub-leasing of a 7,000 square metre property it had previously indicated would be occupied by half its Christchurch workforce.

Acting chief executive David Wade said he was reviewing the future use of the building, being built on behalf of Tait by charity- based The Tait Foundation.

One possible outcome of the review was the lease or part lease of the new premises to an outside tech-based tenant.

A decision would be made in the next two to three weeks.

"We have signed a head lease, but as part of these proposed changes, I am looking at the timing of when we move in."

For example, Tait could delay a shift into the building if a suitable tenant was found.

The consultation on staff cuts would continue until the end of May. They would affect both management and core staff, though those in engineering and supply chain would see the largest impact.

Wade said in the past five years Tait Communications had spent nearly $150m on research and development of new products.

The company had developed two digital radio hardware communications platforms that formed the basis for export sales and had a new strategy of providing clients with servicing and management solutions for its own products.

These platform designs, backed by software solutions, should last 10-15 years, Wade said.

"This will see a progressive shift from developing hardware products to providing software and professional services."

The company's main overseas bases in Brisbane, Houston and Vienna would also be affected by the changes using natural attrition there to change the mix of staff.

Chief marketing officer James Kyd said Tait also wanted to ramp up its presence in South America to chase sales in that market.

"We have got to be in a prudent [financial] position to be able to capture them."

Asked where employees to be made redundant might go, Kyd said: "A lot of them are in the technology industry so actually that's an industry that's seen some good size and growth in the market."

Wade said the export climate had been impacted by governments around the globe taking a tighter line on spending, including the digital communications systems Tait supplied.

Former Tait chief executive Frank Owen recently resigned from Tait for personal reasons. But Owen would remain on the Tait board for the foreseeable future and was still working directly for the company until mid July before a move to Europe.

The Press