Educomp Starts Cost Optimisation; Cuts 3,500 Jobs

<div>Education solutions provider Educomp Solutions said on Friday, 16 August, it has cut 3,500 jobs in the last three months and has also initiated measures to spur growth.<br /><br />&quot;Educomp has announced a slew of measures aimed at putting the company back on a growth trajectory at a time when market sentiment is adversely impacting bottom lines across industry and has pushed the education sector into negative growth territory,&quot; it said in a release.<br /><br />The plan entails modifications in structure, systems and sales strategies to return the firm to profitability in the current and following fiscal. Within this transformational plan, a series of tactical steps have been identified to fast-track the correction, it added.<br /><br />Redundancies are being calibrated in a progressive manner and employee strength is being rationalised. Contracts of unproductive staff are being terminated, while enhancing responsibilities among existing staff to control costs without impacting performance, it said.<br /><br />&quot;Over the last 3 months, the company has let go over 3,500 employees. This alone has the potential of significant savings for the company,&quot; Educomp added.<br /><br />Collections are being prioritised and a zero-tolerance regime for recoveries has been initiated and around 750 schools which have delayed payments have been sent notices, it said.<br /><br />&quot;While Smartclass has always enjoyed a loyal customer base, 750 non-compliant schools which represent less than 5 per cent of the installed base have been asked to show cause for their repeated delays,&quot; Educomp Smartclass COO Divya Lal said.<br /><br />Recently, the Gurgaon-based firm outsourced its service and maintenance logistics to HCL Infosystems in a bid to exploit efficiencies of scale as well as provide specialist services to existing and new customers.<br /><br />The company is targeting a reduction in operational costs of close to 20 per cent over the last fiscal due to these measures.<br /><br /><br />(PTI)</div>