TekSavvy lays off 130 employees due to ISP court challenge and COVID-19: report [Update]

TekSavvy will reportedly lay off 130 employees and plans to raise its rates due to the increased costs related to COVID-19 and the ongoing internet service provider court challenge.

This news comes first from journalist Peter Nowak and we’ve also confirmed with TekSavvy that it indeed let go of 130 employees, and the company will also be increasing its monthly rates by $5 on May 1st.

The aforementioned ISP court challenge is regarding the five major cable companies (Rogers, Shaw Communications, Eastlink, Cogeco, and Videotron), and Bell requests to the federal court challenge in November to overrule a 2019 regulatory decision that slashed wholesale rates that carriers can charge independent ISPs like TekSavvy.

Wholesale rates are paid by competitors, like TekSavvy and Distributel, which then get access to high-speed networks from incumbents like Bell, Rogers, and Telus. Rates are set so that incumbents can charge for this access after the CRTC reviews information regarding how much it costs to operate networks.

Following appeals filed by the larger carriers, the federal court suspended the CRTC’s wholesale rates decision. Since then, TekSavvy has repeatedly appealed to Canadian consumers for support in the battle with independent internet service providers versus the bigger telecoms.

Earlier this year, TekSavvy filed a complaint with the Competition Bureau that alleges that ISPs like Bell and Rogers engaged in anti-competitive practices like manipulating rates.

More recently, the carrier temporarily stopped accepting new customer orders due to COVID-19, as the company works to transition its call centre employees to work from home.

With files from Aisha Malik.

Source: Peter Nowak (@peternowak)

Update 03/26/2020: We’ve confirmed with TekSavvy that rates will increase by $5 and that 130 people were laid off. We’ll update this post with further details when they become available.

Update 03/27/2020: TekSavvy has told MobileSyrup that the price increases and layoffs are separate from COVID-19, and that it would have had to take these actions regardless due to the uncertainty of the court cases on the wholesale rates.

It notes that if there isn’t any “rate relief” in the form of new wholesale pricing then further action will likely be required.

Additionally, an email to customers notes, “TekSavvy has made difficult decisions in order to continue providing you with the service you expect and deserve. Starting with your first billing cycle on or after May 1, 2020 there will be a change to your current package.”