IF ever there was an example of the branch economy at work it occurred this week when listed debt collection agency RMG decided to shut down its Perth back office and run the WA operation with just a sales force.
On Monday, more 60 people found out they had just a few weeks’ work left, discovering that their part in RMG’s formation as a public company had simply been a cameo role.
Most of those losing their jobs will have worked for formerly independent groups like Pioneer Credit Management Services and its one-time rival Laurens & Munns.
Pioneer was a founding member of the 16 Australian and New Zealand debt collectors cobbled together to form RMG, which was listed last year in relatively successful float.
The group maintained its aggression, buying out the estranged partners of Laurens & Munns, arguably the biggest debt collector in Perth, at least by staff numbers.
Former Pioneer proprietor Keith John was retained to manage the operations and continue running the Asian business he had started before RMG turned up on the scene. He was also earmarked for greater things in the business.
But two months ago Mr John’s star faded when RMG’s foundation managing director Paul Cooney was dumped as head of the company and replaced by James Boult.
While Mr John took holidays in China, RMG decided the Perth office administration could be sacrificed under a new operating plan known as Project One. Perth is not alone. It is joined by similar cutbacks in Queensland, South Australia and regional Victoria, as RMG consolidates its back office to Melbourne in a bid to save costs of around $6 million.
Sales capacity will be boosted in those centres, but the reality is the move costs jobs in WA.
Mr John said he learned of the plan on Thursday and, while he is financially untroubled by the move, under which he also will leave the company, he said the staff losses at the company built by his family were difficult to take.
“I am devastated,” he said.
