Leaked Telecom memo: confirming layoff rumours? What you think?

Forums › Spark New Zealand (including Skinny and BigPipe) › Leaked Telecom memo: confirming layoff rumours? What you think?

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#767849 22-Feb-2013 19:00

Bung: IIRC Rod Deane's vision was for Telecom to be a corporate head office under 2000 staff with the rest outsourced.

The division I was in during the mid 1990s tried that by out sourcing 50% of it's staff. 12 months later when the costs were gone over it had cost them 50% more with this out sourcing so it was reined in pretty quick.

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DarthKermit

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#767859 22-Feb-2013 19:15

wakaridnnz: It seems no amount of profit is enough in this day and age!

A glorified utilities company can make a net profit of $156 million for six months and still feel the need to trim the fat!

$156 million means nothing. How much of a return on investment does this amount to?

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antoniosk

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#767866 22-Feb-2013 19:34

Ah, the famous leaked emails....

http://www.geekzone.co.nz/forums.asp?forumid=44&topicid=10964

Simon's note isn't all that grumpy - it could always have been a lot worse - and the simple reality is Telecom does need to be something new, and represent something new. The future isn't about a phone anymore, or even Internet....

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DonGould

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#767871 22-Feb-2013 19:46

DarthKermit: $156 million means nothing. How much of a return on investment does this amount to?

The other question is what is the investment actually worth? Is the company simply over valued?

$156m on a $1.5b dollar company isn't that bad, but if the company is valued at $5b it's not so good... but what is the company actually worth?

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DonGould

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#767874 22-Feb-2013 19:51

antoniosk: Ah, the famous leaked emails....

http://www.geekzone.co.nz/forums.asp?forumid=44&topicid=10964

Simon's note isn't all that grumpy - it could always have been a lot worse - and the simple reality is Telecom does need to be something new, and represent something new. The future isn't about a phone anymore, or even Internet....

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10416477

wow... just wow.

Surely someone was pulling a leg?

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gzt

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#767876 22-Feb-2013 19:56

Approx NZD$4.3B on the day today - http://nz.finance.yahoo.com/q?s=TEL.NZ

More here: http://investor.telecom.co.nz

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DonGould

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#767878 22-Feb-2013 20:01

gzt: Approx NZD$4.3B on the day - http://nz.finance.yahoo.com/q?s=TEL.NZ

More here: http://investor.telecom.co.nz

ya, might be a bit over valued if we consider the value of TCL (and I don't know what VF is valued at), but not hugely when you consider the reach.

But the other question is simply are they selling enough?

There's resource in this building for 40 phone lines... 3 are connected in the whole block. How many other locations are like this?

D

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#767882 22-Feb-2013 20:10

Well, that's the magic of the sharemarket. It's worth what you think it is worth on the day. Telecom's traditional market dominance and perceived monopoly status gives an aura of stability and an ability to put their stamp on new markets whenever one comes along.

DonGould

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#767906 22-Feb-2013 20:43

gzt: Well, that's the magic of the sharemarket. It's worth what you think it is worth on the day. Telecom's traditional market dominance and perceived monopoly status gives an aura of stability and an ability to put their stamp on new markets whenever one comes along.

I think they need to get that email platform back in house and sorted out.

I think you're right, but I think that sense of value is going to dilute increasingly quickly if they keep being dogged by the on going email issues.

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AKLWestie

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#767910 22-Feb-2013 20:57

Didn't feel good after reading the news. I got two friends (husband and wife) working for them and I hope they will be OK.

DonGould

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#767915 22-Feb-2013 21:02

The other question that has to be asked is what impact will tipping people into the market have?

How many customers will those folk take with them?

How many new enterprises with they help rise up to provide even more competition?

I'm sure Vodafone are looking at this question as well right now. How many of the TCL staff do they want to let go to then join someone else and take customers with them?

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#767943 22-Feb-2013 22:23

I heard they had a 30% drop in revenue from last year. That is a huge drop, although maybe partly due to chorus being divided up (not sure when that occurred). So I can see why job cuts are warranted, as they are a smaller company now than they used to be. They used to be the largest company in NZ.

The current value of telecom is basically it's market cap, which is based on it's current sharemarket value, which all can be found on the NZX website.

NonprayingMantis

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#767946 22-Feb-2013 22:34

wakaridnnz: It seems no amount of profit is enough in this day and age!

A glorified utilities company can make a net profit of $156 million for six months and still feel the need to trim the fat!

Just curious. On what basis is 165m too much? Looks like revenue for the half is around 2bn, which makes the net profit around 8% of revenue. Or to look at it another way, of the roughly $100 household phone bill, around $8 is profit, the rest is just costs passed through. That doesn't seem overly excessive to me.

freitasm

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#767957 22-Feb-2013 22:46

mattwnz: I heard they had a 30% drop in revenue from last year. That is a huge drop, although maybe partly due to chorus being divided up (not sure when that occurred). So I can see why job cuts are warranted, as they are a smaller company now than they used to be. They used to be the largest company in NZ.

You should read the documents then, instead of rumours. They did have a drop in revenue, and yes it was because of the Chorus demerger. But they also point out that taking in this consideration there was an actual 3% increase in revenue.

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mattwnz

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#767971 22-Feb-2013 23:06

freitasm:
mattwnz: I heard they had a 30% drop in revenue from last year. That is a huge drop, although maybe partly due to chorus being divided up (not sure when that occurred). So I can see why job cuts are warranted, as they are a smaller company now than they used to be. They used to be the largest company in NZ.

You should read the documents then, instead of rumours. They did have a drop in revenue, and yes it was because of the Chorus demerger. But they also point out that taking in this consideration there was an actual 3% increase in revenue.

It was on the news, so I presume factural. But the problem is that the staffing has likely remained the same prior to the demerging, hence they are just adjusting the staff to the new businesses size. But they have over 2500 earning over 100k, and 10 people earning over 1 million, so they pay out quite a lot in wages.

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