Telecom confirms IT review

Telecom has confirmed it is reviewing the management of its internal technology systems, much of which is now outsourced.

In 1999, EDS beat IBM to win a 10-year $1.5 billion contract to supply Telecom's information systems services.

Company spokesman Mark Watts said seven technology companies had presented "white paper" proposals aimed at improving the company's internal IT services.

"The process has got a long way to run. We've asked people to put ideas in front of us and we'll go from there."

Watts said the project team was short-listing a few providers and would ask for further proposals in the coming months.

News reports yesterday said job losses of 400 to 1500 could be expected, with the company's IT services business Gen-i bearing the brunt.

Labour Party communications spokeswoman Clare Curran told the Dominion Post a tender process was well advanced within Telecom "that could and is likely to outsource a large number of hi-tech jobs overseas".

Watts said the information reported had come from proposals put forward by the IT outsourcing companies rather than internal Telecom documents, none of which involved cuts to Gen-i staff.

"Gen-i staff do not feature in these proposals."

However, Watts could not confirm that there would be no changes or job losses.

Council of Trade Unions president Helen Kelly said the changes were a "narrow, short-term move".

Telecom, which reports its first-half earnings on Friday next week, is in the throes of a multi-year programme aimed at cutting costs.

- Additional reporting NZPA