Telus cutting 6,000 positions
The Canadian Press - Aug 04, 2023 - BC Biz

Photo: The Canadian Press

Telus Corp. announced Friday it is cutting 6,000 jobs as it seeks to adapt to a “rapidly transforming industry,” saying issues such as regulation and competition have prompted the need to reduce its payroll.

The Vancouver-based telecommunications company said the reduction includes 4,000 workers at its main Telus business, half of which are being laid off. The other portion is made up of those who would be offered early retirement and voluntary departure packages, along with vacancies that will not be refilled.

The remaining 2,000 cuts are at Telus International, which provides IT services and customer service to global clients.

“It was a very difficult decision,” Telus chief financial officer Doug French said.

“The industry keeps changing, and from a competitive perspective we always want to prepare ourselves for the future. We see more digitization, we see prices are coming down in our industry, which customers are looking for. And so preparing to ensure we continue to be very competitive in the market, we need to align our cost structure to what that looks like.”

Earlier this year, federal Industry Minister Francois-Philippe Champagne detailed a new mandate for the CRTC, requiring the federal telecommunications regulator to implement new rules to bolster consumer rights, affordability, competition and universal access.

The directive rescinded a 2006 policy direction for the agency to rely on market forces in making decisions.

But French said the federal government should “let the market compete.”

“We’re one of the few countries in the world that still has four national competitors. There’s been consolidation everywhere else,” he said. “We obviously would prefer to just have straight competition and regulation. I believe the competitive environment in Canada is very, very strong.”

He added major telecommunications providers such as Telus pay among the highest spectrum costs globally given Canada’s size and relatively small population.

“It’s very, very expensive to do that,” he said. “To keep investment going, you have to have a return.”

French said the cuts also reflect a shift toward increased digitization in the sector, as customers “want more self-serve” options, along with the finalization of recent mergers and acquisitions by the company.

Last month, Telus revised its annual guidance for 2023 downward, citing demand pressures affecting Telus International in particular as the technology sector looks to reduce costs. The company said it was targeting consolidated operating revenue growth of 9.5% to 11.5%, down from 11% to 14%.

“Part of the announcement today is also a rightsizing within Telus International to align their supply of labour, let’s say, to the revenue stream that they see,” French said.

Telus had 108,500 workers at the end of last year, according to financial markets data firm Refinitiv. French said cuts would affect employees across “all areas of our business” and be complete by the end of the year, with most done by the start of the fourth quarter.

The restructuring will cost the company $475 million in 2023 and lead to annual savings of more than $325 million, Telus said.

Its plans to reduce its workforce were announced at the same time as the company revealed its second-quarter net income fell almost 61% from the same period last year to $196 million.

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