Date: May 02 2012
Optus, Australia's second-biggest telco, said today it will cut 750 jobs over coming months in a major restructure of its business designed to boost profitability.
The company said the job retrenchments - amounting to about one in 12 Optus jobs - will come "from senior and middle management as well as operations, back office and support functions".
Optus, a subsidiary of Singapore Telecom, expects a $37 million one-off charge from the changes.
The cuts from Optus come after bigger rival Telstra said in December it would lop 280 jobs in Australia and send them offshore to boost productivity over the next three years. Telstra subsidiary Sensis also chopped 110 jobs from its Yellow Pages sales team in January.
Optus had 9726 staff at the end of 2011. It generated $9.37 billion in revenues in 2010-11.
The revamp would also cut "a number of operational, back office and administrative functions to drive greater efficiencies in response to the increasingly competitive trading environment", the company said.
NSW jobs hit
Two-thirds of the redundant Optus roles will be in Sydney "with the remainder in the ACT, Queensland, South Australia and Victoria", said a spokeswoman for the company.
Kevin Russell, chief executive officer for Optus's Australian consumer division, said the cuts were necessary to improve the company's competitiveness.
"The competitive environment requires Optus to have a sustainable cost structure to remain competitive and continue to deliver value to our customers," he said.
The job cuts are the latest to be announced by the services sector, and follow plans by several of the big banks to cull thousands of positions. Retailers are also complaining about weak consumer spending.
"Some restructuring is needed but 750 job cuts shows a concerted effort to take costs out of business," said BBY analyst Mark McDonnell.
"The telco industry around the world is confronted with a significant lack of growth," he said.
"There is an enormous amount of traffic growth but not as much revenue."
In order to expand profit, telcos are being forced to trim costs, said Mr McDonnell.
But the latest job cuts from Optus "were a sign of the times", he said, following Qantas's announcement of 400 job cuts yesterday with the threat that 600 more positions could go.
Also the State of Victoria said yesterday that 600 public sector jobs would be slashed in its latest budget.
The RBA cut the cash rate by 50 basis points yesterday in an effort to stimulate the domestic economy in which consumer confidence, borrowing and spending remain under a cloud.
Job security is one of the worries holding back household spending, although the overall jobless rate remains about 5 per cent.
- with Bloomberg
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