Telecom redundancies

Stuff reports:

Telecom yesterday declined to scotch claims by Labour communications spokeswoman Clare Curran that as many as 1500 of its 7600 staff could lose their jobs as a result of a restructure first announced by Telecom chief executive Simon Moutter last month.

Telecom spokesman Andrew Pirie said that while job reductions would occur across the board at Telecom, many of the cuts would be to middle management functions in administrative areas such as finance and human resources. …

Even Telecom had been through bigger changes before, he said. That included a plan to shed 5200 staff over four years that was announced in 1993 when Telecom employed about 12,500 people. Prior to its demerger from the Post Office it employed 26,000. Businesses such as the railways had also been through more dramatic changes, he said.

A Telecom manager once joked to me that Telecom wasn’t so much a telecommunications company as a law firm that specialised in telecommunications.

This was in recognition of the fact that much of the actual technical aspects are done by contractors such as Alcatel-Lucent and Yahoo.

Telecom for many years made money through its grip on the monopoly copper lines. We were not well served by that regime.

David Cunliffe and Steven Joyce broke up that monopoly, first by operational separation and then structural separation. Chorus, the monopoly element, is now a separate company.

It has been inevitable that the Telecom of the future would be a different beast. it needs to be a nimble, efficient risk taking competitive company as it now fairly competes against Vodafone and 2 Degrees, plus many minnows.

They have been moving towards this. Their flat rate data roaming rates were a bold move that should win them market share. Their XT network provides so much better coverage than Vodafone, that I swapped over. They are in an environment where you have to work hard to both gain and retain customers.

Such a regime serves us consumers well.

It also means that Telecom’s historic over-staffing (have a look at their rival’s staff numbers) will be dramatically pruned. And for the staff affected, and their families, it is traumatic and awful.  Losing a job, even when you are performing well, is gutting. So on an individual level, those affected have my sympathy.

But at a macro level, these changes are not a bad thing. Our country and economy prospers when companies becomes more efficient, and consumers have choice and competition.