WINNIPEG – After completing a strategic review that began in February, MTS Allstream said Thursday that it is cutting a quarter of Allstream’s workforce, curbing its annual dividend, and pre-funding $120 million into its pension plans.
Some 100 employees have already left Toronto-based Allstream and a further 400 have received working notice and will leave the company later this year and into 2016. The staff reductions are expected to generate approximately $50 million in annualized free cash flow improvement, the company detailed.
CEO Jay Forbes said that the review’s findings revealed “the untapped potential of this company", but stopped short of confirming Allstream’s future as part and parcel of MTS.
“While Allstream's strategic review identified a clear path to profitable growth, it has also re-affirmed that Allstream is not integral or strategic to MTS's future”, reads the company’s news release. “With the expectation of being free cash flow positive hereafter, the Company will evaluate its options from a position of strength, executing a new strategy to create value for its shareholders.”
MTS also revealed a new strategy that includes a stronger customer-first focus, growing core revenues quicker, simplifying its processes, and reinventing its brand.
The company made these announcements while releasing its first quarter results showing that revenue grew 1.6% to $408 million, net income dropped 36% to $26.7 million, and EBITDA dipped 4.9% to $140.4 million.
