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A third of Telecom staff to lose jobs - insider

Published: 10:21AM Friday March 22, 2013 Source: ONE News

A Telecom insider claims the company is likely to cut a third of its workforce.

The source told ONE News that job losses will be far worse than yesterday's estimate by Labour of 1500 and are more likely to be 2500 through a mix of compulsory redundancies and natural attrition.

Telecom revealed last month there would be redundancies as part of a major "strategic shift" but even using the conservative estimate, it is likely to be the highest number of jobs lost at a single time from a single company in New Zealand's history.

Last month, chief executive Simon Moutter told an analysts' briefing he would give an update on the number of job cuts at an investor day in May.

"I'm not going to try and downplay the likely scale of these strategic changes nor sugarcoat the impact it will have on a significant number of our people," he said at the conference.

And as speculation mounts about the number of job losses, it has been revealed that 10 staff at Telecom earn more than a million dollars a year while 2870 earn more than $100,000 a year. More than 7000 people currently work at Telecom.

Analysts are questioning how much could have been saved if the top earners were paid more conservatively, while pointing out that the more a person earns, the more expensive it is to make them redundant.

Andrew Pirie, head of media relations at Telecom, said the company is looking to simplify its structure and is looking across all departments regarding job cuts.

"There is likely to be a lot of impact in the classic sort of middle management area," he said.

Digital learning for low income communities

Meanwhile, the Telecom Foundation today announced a new partnership to bring digital learning to low income communities. The Manaiakalani Education Trust supports 11 schools and the foundation will contribute $1 million over four years.

Chairperson Pat Snedden said the trust will help the digital citizens of New Zealand's future.

"These children and their families are developing the digital DNA required for success in the 21st century workforce and society."

But the future is looking dire for those working at Telecom and Labour leader David Shearer says the job losses will have a huge impact on New Zealand.

"It's going to put people who are highly skilled into the market and we're not ready for them...the Government hasn't got a strategy for IT that will enable these people to be absorbed and for New Zealand to be able to take the benefit of it," he said.

Shearer said Telecom is very top end heavy compared to their competitors and the pruning back should have been done over a period of years.

Prime Minister John Key says the restructure is not about the actions of the Government and all they can do is "make sure that the environment encourages companies to invest".

But Key acknowledged all employees at Telecom will be "feeling a little bit vulnerable about the restructuring".

EPMU organiser Joe Gallagher said today he expected the cuts would be in Telecom's city offices rather than in the regions and Labour fears the mass job cuts could see highly skilled staff leaving the country.

Communications and IT spokesperson Clare Curran told TV ONE's Breakfast this morning that Telecom's decision will send an economic shockwave through the country.

Curran believes it's not just Telecom shedding jobs in the sector and other Telco's may decide to shed jobs as well.

"There needs to be competition in this space. I don't think anybody is saying Telecom shouldn't do it, but perhaps they shouldn't do it all at once, "Curran said.

Economic Development Minister Steven Joyce said yesterday that recent figures from Statistics New Zealand show the ICT sector is growing rapidly and now generates $23 billion of economic activity.

Joyce added that at present there are around 1300 ICT jobs available in Auckland alone.

But Curran questioned the reliability of Joyce's figures.

"Those jobs could be data entry jobs, who knows what they are...our fear is that a lot of these highly paid, highly skilled people will go to Australia."

Telecommunications Users Association chief executive Paul Brislen echoed Curran's claims. He said Telecom currently has too many employees on executive salaries.

He added that he thinks those people cut from Telecom will find it difficult to find new jobs in the industry, considering that Vodafone has bought TelstraClear, reducing competition and job numbers further.