Telecom slashing up to 700 jobs

About 700 Telecom workers - 10 per cent of the company's staff - are likely to lose their jobs before Christmas as it prepares to face greater competition.

A company source said the "transformation process" - another way of describing redundancies - had been going on for nearly a year and staff were anxious about their futures.

"We hope it is over by Christmas," the source said. "It's been going on for months. We want the whole thing sorted out."

Telecom spokesman John Goulter said this morning it would probably be three to four months before the process was finished and it was too early to say how many staff, or which parts of the company, would be affected.

He described as "speculation" the claim that about 700 workers were likely to lose their jobs before Christmas.

Mr Goulter said this morning the process of change was being handled smoothly and he thought it was going through well.

The source said a review of all jobs, from the level below the executive team led by chief executive Theresa Gattung, was being done.

It had been complicated by Telecom buying Gen-i, an information, communication and technology company, in 2004.

In some places, Telecom and Gen-i both had sales and technology teams when only one was needed.

Telecom was caught by surprise by the announcement in May that the Government would force it to open up its local loop - the copper wire network between exchanges and home and business telephones - to competitors.

The source said that meant it had had to quickly adopt strategies to counter increased competition.

Business customers had also moved away from having a voice services manager and an information technology manager to having a chief information officer, who oversaw all voice and data systems.

Voice and IT

As a result, the source said, Telecom was giving customers voice and IT services through one division when previously two or more divisions had been involved.

The source said some Telecom workers were concerned that senior staff caught by surprise when the Government announced the local-loop unbundling would retain their jobs while others lost theirs.

A Telecom spokesman confirmed last night that redundancies were likely as a result of its "Next Generation" review, but said the number would not be known until the process was complete.

That was unlikely to be this month. "We are working towards a leaner, more efficient Telecom," he said.

Telecom has 7025 staff in New Zealand and 1975 in Australia. It has about 700 frontline sales people and about 2000 technical-support staff.

Other staff handle administration, marketing, legal work and general corporate duties.

"The telecommunications industry is changing so we need to be as efficient as possible," the spokesman said.

Telecom's share price was hit hard by the Government unbundling announcement.

Shares were trading at about $5.60 before the announcement but fell nearly 28 per cent to $4.04 by the end of June, wiping $3 billion off the company's market capitalisation.

The shares closed last night up 1c at $4.30.

The company announced a $435 million loss after tax for the year to June after writing off $1.2 billion of value from its Australian operations.


SLIMMING DOWN

* Telecom is combining calling, mobile and broadband services for an all-in price, aimed at overcoming predicted declines in its fixed-line revenue and the effect of the Government's regulatory review.

* Cuts are planned in its corporate, finance and marketing divisions.

* Its purchase of Gen-i, an information, communication and technology company, has created staffing double-ups in some areas.

- OTAGO DAILY TIMES