Faced with low income from its licences and patents, the newly-privatised
British Technology Group is cutting costs through redundancies and pay cuts.
News of the dramatic shake-up planned for this autumn came in a series of
memos to staff.
The company, which claims to be the world鈥檚 leading technology transfer
organisation, makes money by licensing and patenting inventions and technologies
from universities and from industry. It was privatised earlier this year.
The group denies that it is reneging on commitments made during the
privatisation process to safeguard the 鈥榗ritical mass鈥� of staff. 鈥榃e are
bending over backwards to ensure that the safeguards are kept in place.
That鈥檚 why we fought so hard for the safeguards in the run-up to the privatisation,鈥�
said a spokesman for the company. 鈥榃e are going through a tough time, and
that鈥檚 why we want to keep as many of our people as possible, although we
are losing a small number through voluntary redundancies and early retirements.鈥�
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The company spokesman confirmed that the BTG aims to cut staff costs
by 15 per cent by the end of this year, and that there will be no 鈥榗ost-of-living鈥�
pay increases this year. The only increases will be on a 鈥榤erit鈥� basis.
Ian Harvey, BTG鈥檚 chief executive, said: 鈥極ur people are our most important
asset, and it鈥檚 very important to preserve that.鈥� The company has taken
on a record number of inventions this year, with a 鈥榮teep鈥� rise in the number
coming from universities and companies in the US, he says.
Valerie Ellis, the assistant general-secretary of the Institution of
Professionals, Managers and Specialists, which represents around half the
staff at the BTG, said: 鈥榃e are in discussions with BTG with regard to the
future staffing needs of the organisation. Many assurances were made in
Parliament by ministers about the status and conditions of staff at BTG
after privatisation, and we expect those assurances to be respected.鈥�
However, the IPMS is worried about the BTG鈥檚 falling income. 鈥榃e hope
to see management take constructive action to see the BTG has a solid future,鈥�
says Ellis.
The fundamental problem is that the BTG is seeking new sources of income
to replace lucrative licences and patents on pyrethrins, highly specific
insecticides that kill agricultural pests without harming benign insects.
The licences and patents run out in 1994.
鈥極ur current portfolio has some good prospects for the mid to late-1990s,
but on current individual forecasts of identifiable income for 1993/4 to
1995/6, there remains an uncomfortable gap between revenues and our costs
of investment, patents and people,鈥� says Harvey, in a memo circulated to
staff on 8 June.
Harvey told his staff that 鈥榯he acquisition of new technology is of
secondary importance鈥�. The BTG鈥檚 priority, given the impending dearth of
income, 鈥榠s to create revenues from our existing stock of technology, from
readily licensable new technology, or from new income sources鈥�.
In a later memo, dated 23 July, Harvey told the staff that 鈥楤TG has
to live within its means . . . the days of automatic cost-of-living increases,
irrespective of 鈥榓bility to pay鈥�, are gone鈥�.
Harvey denied that he was ignoring the unions, adding that he would
welcome their views on a proposed consultative group representing all staff.
He added: 鈥榃e want to minimise the reduction in our most valuable resource
鈥� experienced people.鈥�
Harvey said this week that there is bound to be a period of 鈥榰ncertainty
and readjustment鈥� when a group moves from the public to the private sector.
鈥楤ut our long-term future is extremely good.鈥�
