Action axes staff prior to tie-up

Action Computer Supplies has dumped 22 of its more experienced sales staff as it continues its shift towards ecommerce.

Action Computer Supplies has dumped 22 of its more experienced sales staff as it continues its shift towards ecommerce.

During the summer, the reseller has been replacing its more experienced and highly paid sales force with lower cost telesales staff. A total of 96 have been recruited to handle ecommerce sales. Among the cull of staff were Kerry Smith, major accounts manager, and Graham Machie, divisional sales director, who spent more than 15 years at Action.

The lay-offs come ahead of the company's merger with US giant Insight, which was announced in May. At the time, the deal was worth $92m through share transactions and was expected to be completed by September.

But it has suffered a series of setbacks. Action's shares were temporarily suspended in July at the company's own request after its shares slumped. Terms of the share Swap were re-evaluated by Insight, reducing the value of each Action share.

David Atherton, managing director of Dabs Direct, said: "The Action-Insight deal does seem to be taking a while. It would not surprise me if Action did make some staff redundant. It is moving more into selling over the internet and you don't need as many staff, especially those that have been around for a long time with higher wages. Dabs reduced its sales staff from 200 to 175 as revenue increased by 20 per cent and sales volume went up 50 per cent over the past six months."

Action intends to add more telesales staff to its workforce, which already comprises of more than 800, before the end of the year. Twelve per cent of Action's business comes via ecommerce.