Telecom to slash 200 senior jobs

Paul Reynolds. Photo / Dean Purcell

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Telecom says it is targeting a reduction of 200 management positions this year.

The company today cut earnings guidance for its 2011 to 2013 years and kept guidance the same for 2010. It reiterated that it will detail its dividend policy in May.

The company's share price was down 5c at $2.19 in afternoon trading, having fallen to $2.14 in the wake of the guidance announcement.

Telecom chief executive Paul Reynolds talked about the management job reduction target at a briefing on today's guidance. He said given weaker revenue the company was managing costs and had identified further opportunities to take costs out of the business.

Earnings before interest and tax and depreciation and amortisation (ebitda) for its financial 2011 year is cut to between $1.72 billion to $1.78 billion. It previously predicted a 4 per cent to 6 per cent rise to between $1.82 billion to $1.855 billion.

For the 2012 financial year the company had been predicting ebitda would rise by $70m to $110m. This is now predicted to rise between $20m to $80m.

For the financial year 2013 ebitda guidance has been cut to a rise of $20m to $80m from previous guidance of a rise of between $75m and $115m.

The changes to guidance reflected government regulatory decisions, and a softening revenue outlook due to lower mobile revenue growth, price pressures in voice and data markets, flow on impacts of the economic downturn, management initiatives to drive harder on cost out programmes outlined in May 2009.

Telecom expects capital expenditure to reduce from $1.1 billion to $1.2b in its 2010 financial year to between $1b and $1.1b in its 2011 financial year.

Mr Reynolds said the company was open to working with the Government on a full range of approaches to its ultra-fast broadband initiative.

Today's guidance assumes retention of the AAPT business in Australia.

Mr Reynolds told journalists that if the company received an offer for AAPT that was in the interests of shareholders it would give it serious consideration.

The AAPT business was not considered core to the company's mainstream business in New Zealand but it had been managed hard to achieve positive cashflows.

- NZPA