TracPlus jobs may go due to pandemic

DUNEDIN tracking and communication company TracPlus is considering cutting more than half its workforce after growth it anticipated did not occur because of Covid19 disruptions in the aviation sector.

The company, which had 32 staff earlier this year, is in consultation with 14 of its workers about making them redundant and yesterday called for more voluntary redundancies from the remaining staff.

TracPlus chairman John O’Hara said he expected a final decision, which he insisted had not yet been made, to be announced next week.

Chief executive Trevor McIntyre said it was a difficult proposal to have to put forward.

‘‘It is very disappointing, it’s sad. We’ve got a lot of great people.

‘‘. . . you never do this stuff in business with any great relish.

‘‘But at the same time we can only deal with what’s in front of us unfortunately and . . . our predominant market is aviation and that’s been fairly heavily hit.’’

Mr O’Hara said that as a result of Covid19 the company also changed its business model to one that needed fewer permanent staff.

Typically, TracPlus would build products and then try to sell them; now it would get customers to commit to a purchase before building it.

‘‘This is a trend I’ve observed across the tech sector and not just specific to TracPlus.

‘‘We recently had some experience with bringing in outside consultants . . . to help us with product build and that’s been successful.’’

TracPlus supplies first responders, firefighters and others, such as those in the military and aviation sectors, with live tracking technology and communication.

Growth the firm had anticipated in the aviation sector and based on preCovid19 feedback from customers had not happened, Mr O’Hara said.

‘‘The problem we find ourselves in is that we had expanded our staff significantly in the past year in expectation of growth that hasn’t eventuated.’’

While firefighting was experiencing growth because of the increase in forest fires, the aviation sector had lost a lot of charter and tourism business, Mr O’Hara said.

Mr McIntyre said TracPlus had explored and used support options such as the wage subsidy and help from New Zealand Trade and Enterprise before deciding on the restructure proposal.

The company received an injection of $5 million in May from technology investment firm Movac, which had been used to help craft growth.

It also acquired a Waikato hardware company.

‘‘That money was spent investing in a market that has not materialised as fast as we expected it to,’’ Mr O’Hara said.

Two of the company’s overseas offices would be affected by the job cuts, but Mr McIntyre would not identify which offices they were.

TracPlus’ overseas bases — predominantly sales operations — are in Chile, Australia, South Africa and the United States.