Optus swings axe on 350 more jobs

Optus has confirmed it will slash around 350 jobs in the latest round of layoffs as part of the operator's business transformation strategy.

The company has announced a sweeping restructuring of its corporate, consumer and business divisions. Through the revamp, the company aims to “centralise and consolidate roles across a number of corporate functions”.

Some positions will become redundant as a result of the changes, Optus said, and as a result, “approximately 350 people will be leaving Optus over the next few weeks”.

Rumours that Optus was planning to announce more layoffs started circulating earlier this week, but at the time reports indicated that only around 200 jobs would be cut.

Fairfax Media reports that more than half of the job cuts will come from the company’s Sydney operations and only back-office roles are being affected. Victoria will be the next hardest hit state.

iTnews notes that Optus has already laid off 1500 staff during the last two years, since parent company SingTel announced a group-wide restructure into consumer, digital life and ICT divisions. Optus cut 962 jobs in the first year of its transformation program.

Optus’s end of the transformation program was spearheaded by Kevin Russell, who was appointed Optus group CEO in January 2012.

The strategy is showing signs of paying off - the company reported a strong 25% increase in December quarter profit to $227 million. But the signals are mixed, as revenue fell by 5.4% to $2.16 billion over the same period, and its mobile subscriber base fell by 64,000.

Russell stepped down from the CEO role at the end of March this year. Paul O’Sullivan, Optus’s CEO, group consumer, has stepped in as acting group CEO until a replacement can be found.

Telecom analyst Paul Budde told Computerworld that structural changes of the sort Optus is pursuing are needed to help the Australian telecom sector ensure sustainability. “We see both Telstra and Optus working hard on this but in comparison to other sectors they are still lagging behind so expect more cuts moving forwards,” he said.

In February, Telstra announced plans to cut 800 jobs at its advertising and directory arm Sensis.

And it's not just the two incumbents that are pursuing job cuts. Optus’s announcement came days after M2 Group - owner of telecom companies Dodo, iPrimus and Commander - announced plans to slash 150 jobs of its own.

M2 CEO Geoff Horth told the Australian Financial Review that the NBN is a driving force pushing operators to reduce staff and costs. “The realisation that we all become resellers in an NBN world is a very important one,” he said. “So to make good margins when you’re sweating someone else’s infrastructure you just have to be very, very efficient.”

ISP iiNet also plans to make reducing costs a core focus of the five-year business plan it is currently formulating, founder Michael Malone told AFR for a separate story.

Image courtesy of Martin Cathrae under CC