Transfield proposes 154 job cuts

Contractor Transfield Services is proposing to make 154 staff redundant, saying it needed to adapt its telecommunications business to stay ahead of significant changes.

The move was revealed today by the Engineering, Printing and Manufacturing Union (EPMU) which said 125 of the redundancies involved field managers, designers and field staff throughout much of the country.

The EPMU said Transfield was a major contractor for Telecom and the redundancies showed Telecom's failure to properly fund the network.

In June Telecom's network access business Chorus announced it was awarding a 10-year contract worth about $1 billion to Transfield to carry out field force operations in several parts of the country.

But it also announced it was bringing in Australian company Visionstream in some areas, making it the third company doing the work, along with Transfield and Downer EDi Engineering.

The three 10-year contracts were worth a total of about $3 billion.

Today the EPMU said it would be fighting the Transfield redundancies, but also said the entire industry was being starved of cash as Telecom moved to squeeze profit from its operations.

That could be seen in the attempts by Visionstream to force workers into "dire" contracting arrangements, the EPMU said.

"The union is calling for the Government to step in now before it is too late for the skilled workforce and for New Zealand's vital telecommunications infrastructure."

EPMU national secretary Andrew Little said Telecom had an ongoing tactic of playing contractors off against each other to drive prices down.

"It's a model that's hurting our members and endangering the long term security of New Zealand's broadband," he said.

Telecom had shown it could not be trusted with the responsibility to maintain vital communications infrastructure.

The EPMU said Transfield had told workers the redundancies were part of the company's response to "remain competitive to match changing market conditions and win new business".

Following a consultation process, Transfield was intending to make its final decision known on September 4.

In a brief statement, Transfield corporate affairs manager David Jamieson said the telecommunications industry was in the middle of significant changes.

"We need to adapt and evolve our telecommunications business to stay ahead of those changes," Jamieson said.

Chorus spokeswoman Melanie Marshall said changes in the industry were not because Chorus wanted a network that ran cheaper, but because customers were demanding even better services.

As well as the $3b commitment for the next 10 years with its service companies, Chorus spent $364 million on just the fixed network last year, and was planning to spend $417 million this year, she said.

Also under way was the $1.4b programme to deliver faster broadband through the fibre to the node project.

- NZPA