Telecom's 1500 job cuts a "necessary evil"

Telecom is cutting 1500 jobs says Labour MP Clare Curran, a number she says she was provided by "a [very] reliable source" inside New Zealand's largest telco. 

Adding fuel to the fire is Telecom chief executive Simon Moutter who said in February the company is cutting "hundreds" of jobs. A Telecom spokesperson says "fundamentally, Ms Curran’s statement does not really say anything new over and above what we said [at our February half-yearly results]."

Telecom's PR general manager Andrew Pirie says "We have nothing more substantive to say beyond what was said at our half-yearly results announcement on February 22."

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Telecommunications Users' Association NZ head Paul Brislen says despite this being a difficult time for Telecom staff, the decision to cull numbers is a "necessary evil". He points out that Telecom has more employees earning at least $100,000 than competitor Vodafone has staff in total. According to Telecom's annual report last year, the company is paying 2870 of its employs six figure salaries.

Brislen says he expects the majority of the cuts to be made at this level.

"Mouter said to me recently that while the company's workforce has shrunk by 10 percent, the overall payroll has increased by nearly $100 million a year," says Brislen.

"It's a necessary evil, at least that's the view of the industry that it's something Telecom should have done a long time ago."

Brislen says in many ways Telecom behaves like it still holds the vertically integrated monopoly it had when Chorus was a part of the business. After the Telecom-Chorus demerger in late 2011,  the telco should have started downsizing duplicated or unnecessary roles to remain competitive.

It will be tough for senior telco specialists to find roles in New Zealand, he adds.

"It's a tricky time for the telco industry as a whole. With Vodafone buying Telstraclear not only are they unlikely to hire anytime soon, but you've lost another player to soak up these workers," says Brislen.

Earlier this month Telecom announced it was cutting 120 jobs in Gen-i's Australian offices.