SingTel’s Optus to Cut 8% of Jobs in Unit Restructure
Singapore Telecommunications Ltd. (ST)’s Optus unit, Australia’s second-largest phone company, will cut about eight percent of jobs to reduce costs as it restructures to focus on customer service amid increased competition.
About 750 people will be fired as the company centralizes roles including human resources, administration and strategy, Sydney-based Optus said in an e-mailed statement today. The company will take a one-time charge of A$37 million ($38 million) against earnings, it said.
Optus, wholly owned by Singapore-based SingTel, is facing a heightened battle with Telstra Corp. (TLS) for mobile and high speed Internet customers as its larger rival is forced to quit its wholesale business and compete harder for retail customers.
The market environment “requires Optus to have a sustainable cost structure to remain competitive,” Optus Consumer Australia Chief Executive Officer Kevin Russell said in the statement.
Optus had 9,726 employees on Dec. 31, spokeswoman Elizabeth Greene said by e-mail from Sydney.
While SingTel’s Australian business makes up about two- thirds of the company’s sales and assets, its higher costs mean the division accounts for less than half of profits.
SingTel’s Australian operations had an operating profit margin of 13 percent during the year to the end of March 2011, compared with 27 percent at its Singaporean businesses, according to the company’s annual report.
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