PC assembler and electronics distributor Mustek has begun a restructuring of its business that will probably result in job losses. Its coastal operations may be hardest hit.

The JSE-listed company has conducted a review of its strategy, processes, systems and technology, says MD Hein Engelbrecht (pictured), and has identified a number of ways in which it can streamline its operations and cut costs.

He declines to say how many employees will be affected by the restructuring.

“The company’s business model has shifted from predominantly assembly to assembly and distribution, resulting in duplication of certain processes and procedures,” he says.

A number of services provided at Mustek’s coastal operations will be consolidated in Johannesburg. The company has upgraded its telecommunications infrastructure to better handle online support centrally from its head office in Midrand.

Engelbrecht says trading conditions in the IT sector are poor. Hardware and software companies, in particular — especially those that don’t have a big services component to their revenue mix — are feeling the effects of the economic recession.

“If we see any unit growth in the industry overall, and in desktop PCs specifically, in the next year, I’d be very surprised,” Engelbrecht says.

Mustek has gradually reduced its reliance on PC assembly in recent years and increased the distribution side of its business. It now distributes notebook PCs for Toshiba and represents printer manufacturers Brother and Epson. It is a distributor for Samsung and NEC.

Engelbrecht says Mustek hopes to complete the restructuring within 60 days.  — Duncan McLeod, TechCentral