15 Apr 2010

Telecom to axe 200 management jobs

6:27 pm on 15 April 2010

Telecom is to cut 200 management jobs in response to the slowing pace of future earnings.

New Zealand's second-largest listed company announced on Thursday its gross earnings could fall by as much as 5.5% to $1.72 billion in the year to June 2011.

The company is also forecasting lower earnings in 2012 and 2013.

Telecom blames this on falling prices for landline, mobile phones and broadband services due to intense competition, adverse regulatory decisions and the lingering effects of the economic downturn.

Telecom chief executive Paul Reynolds says the company is looking further opportunities to take costs out of the business "through alignment and elimination of duplication.

"Initially, we are targeting a reduction of 200 management positions this year which will avoid frontline customer service and operational roles."

Telecom says it will also seriously consider offers for its Australian arm AAPT if the price is right.

On Thursday, Telecom shares slumped 3% on the news and closed down 6 cents at $2.18 a share.

The share price had already dipped in recent months, following repeated failures of Telecom's XT mobile network affecting thousands of customers, and prompting the resignations of two executives.