Large cuts hark back to time Telus threatened 5,000 cuts during wireless review
By Ahmad Hathout
Telus announced Friday it is cutting 6,000 jobs across its telecom and information technology business, which president and CEO Darren Entwistle partly attributed to getting ahead of regulatory changes.
The job losses are split across Telus and its IT business Telus International, with losses of 4,000 at the former and 2,000 at the latter.
“It is with heavy heart that we are seeking to reduce 6,000 staff positions across our global footprint,” Telus said in its second-quarter results release, adding it is also “offering early retirement and voluntary departure packages.”
The “efficiencies” program, announced Friday, is expected to save the company more than $325 million. The cuts are also in response to Telus International clients making changes to their own costs and a slowing revenue and profit this year, Telus said.
“When you look at the efficiencies that we’re driving, they are preemptive in terms of how we see certain regulatory challenges evolving in the months and years ahead, and we want to get ahead of it,” CEO Darren Entwistle said during the company’s second-quarter results conference call with analysts.
“Our ability to take cost out of the business today will prepare us to better absorb any regulatory impediments,” he said, adding Telus just wants to “control our own destiny along the way.”
Telus is facing a number of possible competitive challenges. Rogers said in its most recent quarterly report that it has taken good market share out west in Telus land after closing its acquisition of Shaw in April. It must also deal with possible regulatory challenges, including mobile virtual network operators roaming on its network — agreements from which must be completed by next week — and the pending wholesale internet review, which may further reduce rates third parties can bulk buy internet capacity from the national players.
Entwistle also reiterated what he has said in different ways for years – that regulatory changes will have negative impacts on investment and employment.
“We will always tune our employment and our investment according to the regulatory environment,” the CEO said. “And if we are seeing regulatory challenges or impediments, that is going to see us diminish the job profile within the Telus organization in response to that and/or also diminish the investment profile.
“We will put shareholder money to work in the areas that can generate the best return overall for our stakeholders,” he added.
Entwistle’s remarks hark back to a time three years ago when the Telus board published a resolution stating it would likely have to cut 5,000 jobs if the CRTC mandated mobile virtual network operators to ride on the national carriers’ wireless networks.
That followed a highly publicized moment during the CRTC’s wireless framework review hearing when Entwistle declared that drastic changes would need to be made when it comes to jobs and the company’s charitable investments if MVNOs were allow to roam on its networks, including reductions in network investments by $1 billion over five years.
Telus’s announcement follows Bell’s own June announcement of 1,300 job cuts.
“Telus has been deceptive to its workforce and to Canadians more generally,” said Donna Hokiro, president of Telus union USW Local 1944, in a statement Friday.
“Telus has been eroding good Canadian jobs at a dramatic rate for the last decade, with no end in sight. Corporate executives have been more concerned about their reputation than the truth or their responsibility to Canadian consumers,” Hokiro said.
It was only this March that the union and Telus hammered out a deal through 2027.
The Telus cuts have also reverberated on Parliament Hill. The New Democratic Party released a statement saying the Liberals have let the “telecom giants run roughshod over Canadians.”
“The loss of these [Telus] jobs is devastating for the workers and their families,” the NDP statement said. “There is never a good time to lose your job, but this news is especially difficult considering the cost of living is so high and people are struggling to pay their mortgages, rent and grocery bills.
“6,000 jobs is a staggering number of layoffs from a profitable company like Telus,” the statement added. “And while these workers lose their jobs, Telus CEO, Darren Entwistle, was paid $17.49 million in 2022.”
Telus said it is simultaneously adopting generative artificial intelligence – which has taken the world by storm recently with the number of chat bots assisting users with various tasks – for Telus International’s digital business strategy.
Otherwise, the telecom announced a bump compared to the second quarter last year of 12.8 per cent in its revenues for the quarter ending June 30 to $4.9 billion, with net income down 60 per cent to $196 million.
Lower net income was driven by factors including higher depreciation, costs of broadband expansion, higher financing costs and an increased interest rate.
Mobile network revenue increased 5.9 per cent, or $95 million, in the quarter, due to growth in mobile phone and the connected device subscriber base.
Mobile phone net new subscribers were 110,000 in the quarter, an increase of 18 per cent, or 17,000, compared to the comparable period. The total subscriber base sat at 9.8 million, an increase of roughly 4 per cent over the year.
Churn, or the rate at which customers leave the company, was up slightly to 0.91 per cent compared to the 0.81 per cent last year. Telus has prided itself on its sub-1 per cent churn for years.
Monthly average revenue per user was up 1.8 per cent, or $1.06, to $58.80 in the quarter.
New connected devices were 124,000 in the quarter, an increase of 35 per cent or 32,000. That was assisted by new internet of things connections and sales of connected devices like tables and mobile internet. The total subscriber base sat at 2.7 million, an increase of 22.1 per cent over the year.
New internet adds were 35,000, up 2.9 per cent over the year, for a total base of 2.5 million – up from last year by 9.3 per cent.
Television adds were also up by 13.3 per cent to 17,000 in the quarter over the year, for a total base of 1.35 million – up by 4.7 per cent.
Home phone losses were at 8,000 this year, higher than the 7,000 lost last year, for a total base of 1.08 – down 2.4 per cent against the comparable period.
