Telus Corp. will be laying off 6,000 employees due to regulations and competition in an effort to decrease their payroll, the company announced on Friday. A spokesperson for Telus Corp. said the movie will help them adapt to the “rapidly changing industry,”
This comes at a time when Canadians already pay amongst the highest cell phone bills anywhere in the world.
“It was a very difficult decision,” said Doug French, the chief financial officer for the Vancouver-based telecommunications company. “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.” said French.
The reduction will include 2,000 layoffs and another 2,000 will be offered early retirement or voluntary departure. Many existing vacancies will not be filled at their main office. Telus International, which serves global customers with IT service is responsible for the remaining 2,000 job cuts.
Part of the change in the industry is tied to a new mandate for the CRTC which was detailed earlier this year by federal Industry Minister Francois-Philippe Champagne. The mandate requires the agency to rule in favour of consumers rights, universal access and affordability. French said he believes that 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,” said French. “We obviously would prefer to just have straight competition and regulation. I believe the competitive environment in Canada is very, very strong.”
Telus and other large telecommunications providers pay some of the highest spectrum costs internationally as a result of Canada’s size and sparse population. “It’s very, very expensive to do that,” said French. “To keep investment going, you have to have a return.”
Last year, Telus employed 108,500 workers and the job cuts will affect “All areas of our business,” according to French.
Telus’ job cuts will lead to an annual savings of more than $325 million however the company will pay out $475 million this year for the restructuring. The announcement comes just after the company faced a 61% decline in net income during the second quarter from the same time last year.
Last month, Rogers Communications Inc. released a memo to their staff offering voluntary departure packages as well, following the company’s purchase of Shaw Communications. The offer is hoping to eliminate any duplication of job roles, however just how many jobs that will be was not made clear.
“When we make a decision like this, it is not easy and we’d prefer not to continue to do more in the future,” said French, who alluded to the possibility of future job cuts. “That being said, depending on market conditions … that would be more determined on what that looks like, including regulation.”
The average Telus customer pays $58.80 for their mobile phone plan, a 1.8% increase from the time last year. The company said the increase is tied to a spike in international travel, thus higher roaming charges.