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Thursday 6th May 2010 |
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SmartPay, the merchant payment services company that acquired assets from its failed competitor ProvencoCadmus, will eliminate about 40 jobs, or 25% of its workforce, by outsourcing the manufacture of EFTPOS terminals.
The company gained a unit assembling terminals at its Glenfield site in Auckland using printed circuit boards sourced from third parties when it acquired the Provenco assets last August. The changes are expected to generate overhead savings of more than 20%, said managing director Ian Bailey.
“As a manufacturer, you have a lot of working capital tied up,” Bailey said. “We build software – it doesn’t really fit our core business.”
He is hopeful the outsourcing move will lift profits in subsequent years.
At the same time, the company plans to localise sales and support capability throughout New Zealand.
“The decision to move to an outsourced production model will release additional working capital, reduce the need to hold components, reduce overall inventory and provide a single point of responsibility for production and product delivery,” Bailey said.
“EFTPOS terminals are becoming increasingly commoditised and require high levels of security and certification to meet international standards,” he said.
Businesswire.co.nz
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