Spark would not say how many roles were potentially impacted.
“We don’t have further details to share at this time as we are focusing on consulting with our people first and foremost,” a spokeswoman said.
“At our first-half results at the end of March, we shared that we would be making changes to our operating model to align it to our new strategy and improve efficiency.”
Chief executive Jolie Hodson told the Herald after the half-year result that between simplification, “digitising customer journeys” and AI measures, the company was on track to achieve its target of $40 million to $60m in cost savings for the full year.
No company-wide consultation was under way at the time.
Rise in labour costs ‘not sustainable’
“Over the first six months of our financial year, our labour costs have increased and in the context of a tough operating environment with ongoing cost inflation, this is not sustainable,” a Spark spokeswoman said today.
“Changes to our operating model will look different in different parts of the business. In some areas we will need to invest for growth and in other areas we will look at how we can be more efficient by removing duplication, working differently or leveraging new technologies like AI.”
The insider said a wider restructure would see five “tribes” in Spark’s “Agile” business structure reduced to three, which he said would be “household”, “SME” and “future”.
After a general announcement, staff were called into “chapter” meetings. In Agile-speak, chapters are subsets of tribes, the insider said. The set-up is designed to get staff from different departments working together.
Rivals also swinging the axe
Spark’s restructure follows similar exercises at Chorus, One NZ (which coincided with a tangle with unionised staff seeking a 10 per cent pay rise) and the tech sector, broadcast media and corporate New Zealand as a whole.
One NZ spokesman Matthew Flood said today: “The bulk of our reorganisation is now complete with a small number of consultations ongoing. We continue to engage in good faith with Unite and negotiations are ongoing.”
Flood said the union dispute was separate from the consultations. The union has put potential job losses at around 100 of One NZ’s 2500-odd staff. Flood declined to give a figure but said it was a “small number”.
The telco’s adjusted net profit fell 4.8 per cent to $157m for the first half of its 2024 financial year, but adjusted ebitda was up and the telco reaffirmed its full-year earnings and dividend guidance.
Spark’s wage bill was up 4 per cent, which was pinned on pay rises in a tight labour market.
Shares were recently trading at $4.97. The stock is up 0.3 per cent over the past year.
The telco is set to move about 1800 Auckland staff into the $650m Fifty Albert building, due to open in 2025.
Charges for Xtra Mail
Spark has also confirmed it will charge for its longstanding free webmail service, Xtra mail, from mid-May.
The service will cost $5.95 per month for Spark customers and $9.95 for others. The telco said it was no longer financially sustainable to offer the service free.
A Spark customer told the Herald: “It seems they’re trying to help dig themselves out of a hole by squeezing another $5.95 a month out of every one of us too indolent to have changed providers in 100 years.”
Chris Keall is an Auckland-based member of the Herald’s business team. He joined the Herald in 2018 and is the technology editor and a senior business writer.
