Exertis UK yesterday put swathes of staff at risk of redundancy amid plans to evolve into a smaller specialist following its sale to AURELIUS.
The distributor yesterday wrote to customers confirming it is making cuts to its Exertis UK Business and Consumer and Exertis Supplies businesses (see letter, bottom).
Five top directors apparently left the business last week following the completion of its sale to German private equity house AURELIUS the previous month.
Now the potential cuts appear to be filtering down through the organisation, with multiple sources telling us that all – or nearly all – staff at the above businesses were put at risk yesterday. Exertis has yet to confirm this.
“If you’re driving, pull over”
One employee on the call yesterday said the message was that Exertis wants to evolve into a small consumer retail specialist.
“Very early on in the day, they put in a mandatory meeting for everybody, saying ‘cancel all meetings… if you’re driving, pull over’,” said the source, who was talking under condition of anonymity.
“The director in situ, Jon Sutherland, came on and read from a script with no emotion – obviously you can’t have emotion in this kind of situation.
“He said, ‘that’s the situation, we’ve been taken over, and with any takeover there are changes companies want to make. Exertis is in the situation where it’s not performing, and not making money. We have to place all staff at risk of redundancy’.”
According to the employee, Exertis has entered into a consultation period of 45 days minimum. Their understanding was that “all staff” were affected, “including those I look after and the managers above me”.
They estimated the move could encompass “between 800 and 1,200” people when including warehouse workers and its offices in Burnley, Harlow, Elland and Basingstoke.
It’s important to stress that the announcement does not appear to include all of the businesses that were in scope of the AURELIUS sale, whose total revenues sat at around £2bn.
Alongside Exertis UK Business and Consumer and Exertis Supplies, the deal also included Hypertec, Exertis Ireland, Macro EV, Exertis Supply Chain Services, MTR and Ztorm.
Letter to customers
Reports from our sources appear to be confirmed by a letter sent to customers yesterday, a screenshot of which has been seen by IT Channel Oxygen.
In the missive, entitled ‘Exertis UK Update”, a representative of the distributor revealed intentions to “transform into a more agile and specialist distributor”.
“These proposed changes have involved putting colleagues in Exertis UK | Business & Consumer and Exertis Supplies at risk while we enter into a period of consultation to discuss proposed changes to our structure,” it stated (see full letter, bottom).
The news comes a month after DCC completed the sale of Exertis IT to private equity house AURELIUS for around £100m.
The distributor has been beset with difficulties since the summer after credit insurers moved to withdraw cover, multiple sources told IT Channel Oxygen.
In a statement to IT Channel Oxygen yesterday, Exertis confirmed that Exertis UK | Business & Consumer will now both come under the remit of Jon Sutherland (who was previously MD of just the consumer business).
It has not yet responded to our requests for further comment this morning.
Talking to IT Channel Oxygen, industry analyst and Informa Fellow Steve Brazier said Exertis has played a “historical role in the UK and European channel”.
“But DCC, an energy conglomerate, was never the right owner and held on too long, leaving Exertis outsmarted and overpowered by companies that lived and breathed tech distribution,” he said.
“It’s difficult to see why Aurelius paid the £100m. Hopefully they find some niches. As a volume player Exertis is finished.”
Exertis UK Update
Dear valued partner
Further to our email on 14 November, I am writing to let you know that as of today we are announcing proposed changes to our Exertis UK| Business & Consumer and Exertis Supplies businesses.
Under our new owners, who bring two decades of experience owning and transforming dozens of companies and helping them perform better under their ownership, I believe there is an opportunity for us to change structurally and transform into a more agile and specialist distributor that can more efficiently and effectively serve your needs.
These proposed changes have involved putting colleagues in Exertis UK | Business & Consumer and Exertis Supplies at risk while we enter into a period of consultation to discuss proposed changes to our structure. No final decisions have been made and we will use the consultation period to discuss viable alternatives to potential redundancies.
There are currently no planed structural changes in the other European businesses either in the UK or Ireland, and we are confident in the professionalism of our UK team to continue delivering for you.
We look forward to your continued partnership and to creating a business together that continues to provide the specialist services and solutions you value.
Doug Woodburn is editor of IT Channel Oxygen
