Canada's Telus to shed 6K workers as profits plunge 61%
Big cheese asks if anyone wants to take early retirement?
Canadian telco Telus plans to ditch 6,000 workers across its business — about six percent of its global workforce — after its profits fell 61 percent year over year during the second quarter of 2023.
Telus CEO Darren Entwistle announced the restructuring in the biz's Q2 earnings release [PDF] on Friday. Some 4,000 positions will be cut at Telus, and 2,000 at Telus International.
The downsizing will include early retirement and voluntary departure incentives. However this is expected to cost the internet and phone provider. "Given the scale of this program, we now expect incremental restructuring investments of up to C$475 million in 2023," Entwistle said. "The program we are announcing today will yield expected cumulative annual cost savings of more than C$325 million."
The majority of these savings should be realized within the next six months, according to CFO Doug French, who attributed the Canadian conglomerate's precipitous quarter to economic headwinds made worse by a "highly competitive environment."
"While our domestic business continues to demonstrate our execution excellence, our technology-oriented verticals, including TI (Telus International) and TAC (Telus Agriculture and Consumer Goods), are facing near term headwinds from pronounced macroeconomic pressures," he said.
These pressures hammered the broadband giant's net income, French explained, which slumped 61 percent to C$196 million ($147 million) in the third quarter, despite gains to the corporation's communications business, including an 18 percent increase in net mobile phone additions. While Telus' profits are down, revenues maintained a positive trajectory, growing roughly 13 percent to C$4.9 billion ($3.7 billion).
The telco has, however revised its 2023 outlook, and now expects full-year operating revenues to grow 9.5-11.5 percent to around C$20 billion, down from the 11-14 percent growth it'd previously targeted.
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Telus is hardly the first telly-phone-and-internet telco to announce layoffs this year. In May, Britain's BT shared its intention to ax up to 55,000 workers, roughly 42 percent of global workforce, by 2030 in a bid to boost its profits.
"By continuing to build and connect like fury, digitize the way we work and simplify our structure, by the end of the 2020s BT Group will rely on a much smaller workforce and a significantly reduced cost base," BT CEO Philip Jansen said at the time.
That same month, Vodafone said it planned to drop 11,000 workers over the next three years in a move it said would improve operations and put a greater emphasis on customers. ®