Localist culls senior managers, sales staff

UPDATE: JAN 27: NBR understands that the first Localist staff to lose their jobs in a restructure left the company on Wednesday. 

28 of the company's sales staff had been asked to re-apply for 16 roles.

The NZ Post subsidiary has also confirmed that the head of technology role currently filled by Ken Holley will be "disestablished.".

"Ken will be leaving Localist on February 20th following a period of handover to the new, smaller, management group," Localist chief executive Blair Glubb said in an internal email leaked to NBR.

"Ken’s contribution to the start-up phase can not be underestimated. He broke new ground in the rapid implementation of cost effective, innovative technology capability. Ken was recognised by his peers as finalist for CIO of the Year in 2011 and will go on to achieve great things."

Localist was evolving from its start-up phase. It now had to focus on monetising the platform created by Mr Holley and others.

"I'm unsure where I will end up but I'm excited about new prospects," Mr Holley said in his own email.

NBR understands that four sales manager positions are also being accessed under the ongoing restructure.

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JAN 17: NZ Post’s Localist directory is in the middle of a restructure exercise that will result in “a smaller management group,” Localist chief executive Blair Glubb told NBR.

READ ALSO: Localist jets in controversial UK consultant savaged by BBC

Mr Glubb also made his first public comment on the industry rumour that Localist’s sales team is being shrunk. The CEO confirmed that 28 sales staff have been asked to re-apply for 16 roles.

Positions at all levels of the business are being reviewed, Mr Glubb said.

“There are definitely going to be changes in the management group and other levels of the business,” the CEO said. However, he disputed an insider’s claim to NBR that all the management team – bar Mr Glubb – would go. “I would not characterise it as a clean out,” the CEO said.

Localist currently employs around 100, the CEO said.

It produces five print directories for different areas of Auckland and operates the Localist.co.nz website.

A former member of Localist’s sales team told NBR that print directory sales were hard going, pinning difficulties on the lingering recession. He remained enthusiastic about Localist’s online prospects.

A price war with Yellow has seen quarter page print ads sold for $250 – described by Mr Glubb as the best deal around in the $600 million Auckland local advertising market – and profile pages on Localist.co.nz go for $10 a month, with setup support free.

The restructure was still in a consultative phase with staff. As required by employment law, staff were being asked for their input and ideas on the restructure. Mr Glubb expected to wrap up the process in another two or three weeks. 

NBR understands that the four managers in Localist’s sales division, and all senior managers, have been asked to reapply for their jobs.

Asked if Localist had blinked first in its battle with Yellow – which has launched an aggressive local counter-attack in Auckland, where the NZ Post subsidiary operates – Mr Glubb said Localist was preparing for its next phase of growth.

Localist chairman Sam Knowles said with the company’s database-building stage behind it, the biggest growth opportunities were in online and mobile, which required “a different skill set and a different quantity of staff). The chairman said the restructure was a natural evolution of the business.

“The proof will be in the pudding,” Mr Glubb said. Once the restructure was complete, people would be able to see Localist was positioning itself to accelerate growth.

Mr Knowles said some senior managers had left for personal reasons. He would not say if they would be replaced, or comment on any staff positions, while the restructure was underway.

Head of marketing and content Sheryl Nichols (still with the company at this point) had resigned to follow partner Tim Nichols to Silicon Valley. Mr Nichols is head of global sales for New Zealand network security company Endace.

Ms Nichols’ marketing role would be replaced by a new chief commercial officer position, Mr Glubb said.

NBR understands that Localist head of technology Ken Holley’s position will go, replaced by a less senior role reporting through to the NZ Post IT team.

Mr Holley declined comment on his employment status, beyond confirming he was in discussions with his employer. "This is still a phenomenal business with heaps of opportunity," the CTO said.

Closer to NZ Post
A source close to Localist's IT team told NBR the restructure would “suck innovation” from Localist, and destroy the “agile” setup pioneered by Mr Holley in favour of placing systems more under the direct control of NZ Post.

Mr Knowles would not comment on whether there would be an independent CTO position after the restructure, but said the cloud computing-centric strategy established by Mr Holley would remain.

The chairman told NBR that Localist would remain operationally separate from NZ Post. It was likely the pair would cooperate more closely on marketing and that some NZ Post services would be added to Localist offers. “We’re looking to get some leverage at the business end,” the chairman said.

Agency sales manager Wesley Peddie left Localist in December (joining Australian marketing services  company Big Mobile, which is setting up a New Zealand office).

Asked if Mr Peddie would be directly replaced by a new head of agency sales, Mr Glubb said, “The proposed structure is fundamentally different from the previous structure, but certainly contains more than one role aimed at addressing the agency market.”

Localist began selling its directory service in March last year.

Neither Mr Glubb nor Mr Knowles would comment in detail on revenue or profit.

Mr Glubb said Localist’s two Auckland central directories, which have just closed, are 30% ahead in revenue than their first editions. Localist updates its five directories every six months.

NZ Post – which slipped to a $35.6 million loss last year – has never detailed its investment in Localist, but it is understood to be in the region of $20 million.

Mr Knowles would not speak to when Localist would become profitable, but said he stood by his earlier comments. In October 2010, the chairman and former Kiwibank CEO said, “Kiwibank is a good example, we set down three years [to turn a profit] and did it in two - that would be my ambition."