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Telecom NZ axes up to 1230 jobs

Telecom NZ axes up to 1230 jobs

Expects to incur about $70 million - $80 million from one-off restructuring costs

Telecom Corporation of New Zealand (ASX:TEL) is reducing its employee base by slashing up to 1230 jobs by mid-2013.

The telecommunications service provider expects to reduce its full-time equivalent staff numbers from 7530 (as of December 31, 2012) to between 6300 and 6600.

Most of the staff cuts will be from its Auckland head office and will affect corporate and management functions in human resources, corporate relations, legal and financial departments.

The cuts include the 120 job redundancies made in its ICT services unit, Gen-i, last month.

The company said, in a statement, that the cuts will be made through constraints on recruitment activity, voluntary and involuntary recruitments, as well as transfer of roles to other employers associated with portfolio rationalisation decisions.

Telecom NZ chief executive, Simon Moutter, said the downsize is a result of a new company strategy to drive “simplification and a competitive cost base”.

“This is an important step to build a leaner, more agile organisation with a competitive cost structure, setting us up to win in the market,” he said.

As a result of the restructure, the company expects to incur one-off costs of $70 million to $80 million in FY13.

It claimed that the flow on impact of the changes onto revenues and non-labour operating costs is uncertain, as is the expectation of further redundancies and other one-off costs. A second update will be provided once the decisions are taken.

Telecom NZ’s adjusted EBITDA for FY13 remains at $1.04 billion to $1.06 billion, excluding the one-off restructuring costs.

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