Innovative Communication Corp., the parent of a host of telecommunications companies in the territory, announced the layoffs Thursday of 18 people from four of its companies.
ICC officials attributed the layoffs to the "drastic downturn" in the Virgin Islands economy and a year-long "consolidation process." The "profitability and financial soundness" of ICC were the priority in the decision to ax the employees, as was stabilizing rates for customers of its subsidiaries, according to Tom Minnich, ICC chief operating officer.
The company owns the V.I. Telephone Corp., VitelCellular, Vitelcom, the Virgin Islands Daily News, St. Thomas-St. John Cable TV, St. Croix Cable TV, ICC-TV and VI PowerNet. ICC employs approximately 660 people. The chairman of the $400-million ICC empire is St. Croix businessman Jeffrey Prosser.
Those laid off held management positions — 12 with Vitelco, four with VitelCellular and one each with Vitelcom and the cable operations, according to Holland Redfield, ICC vice president for corporate affairs.
The layoffs won’t affect Vitelco’s Industrial Development Commission tax breaks, which are contingent on the company maintaining a specific number of workers, Minnich said. The phone company was granted the tax benefits in a controversial move made during former Gov. Roy Schneider’s administration three years ago. They exempt Vitelco from all property, gross receipts and excise taxes, and from 90 percent of income taxes.
"We will maintain the level of employment that is required" under the IDC program, Minnich said in a press release. He said Vitelco’s contract with its unionized workers was unaffected by the layoffs.
In response to the layoffs, Sen. Adlah "Foncie" Donastorg, a staunch critic of Vitelco’s IDC benefits, accused ICC of importing people to fill management positions at the phone company at the same time it is firing locals.
The layoffs prompted Donastorg to again call for a Public Service Commission-led rate investigation of Vitelco, a move ICC and phone company officials have repeatedly fought. Donastorg said that since a rate inquiry hasn’t been conducted for several years, ICC’s claim that the layoffs were done to stabilize rates is unfounded. Basically, he said, the government doesn’t know exactly what Vitelco’s rate of return is and therefore the company "continues to operate as it wishes."
He also noted that the layoffs came two days after Prosser’s V.I. Community Bank — which is owned outright by Prosser, not by ICC — declined to accept the conditions imposed by the V.I. Banking Board in granting approval of VICB's bid to acquire the local assets of Chase Manhattan Bank.
"I would hate to think this is a spiteful gesture . . . because ICC didn’t get what it wanted from the Banking Board," Donastorg said.
Redfield said ICC offered an early retirement program to help trim expenses but the effort didn’t meet the company's financial goals. ICC has an annual payroll of more than $40 million. The laid-off workers will receive a "separation package" and assistance in employment placement outside ICC through the Labor Department.
Prosser, Minnich and ICC spokesman Edwin Crouch could not be reached for comment. A receptionist at ICC headquarters on St. Croix said all three were off island Thursday.
