Telecom sheds nearly 400 jobs

In the year to June 30, 12 Telecom employees earned $1m or more, 41 earned $500,000 or more, and 2974 earned $100,000 or more. Photo / Greg Bowker

Nearly 400 jobs have gone at Telecom over the past year and the company has indicated more cuts are likely.

The standalone mobile, internet and IT retailer split from its infrastructure arm Chorus in November after the lines company won the bulk of the Government's ultra-fast broadband tender. But as well as losing Chorus, Telecom has shed nearly 400 jobs in the past year, the company revealed in its latest set of financial results.

Head of group communications Ian Bonnar said the reduction was a combination of not replacing staff who had left and a "small number of redundancies".

Bonnar also indicated more cuts were on the way, but said there was no set objective to get staff numbers down to a certain level.

"We have a well-stated strategy of simplification - the removal of duplication and reduction in errors and rework ... it's natural that as we make progress with simplification then fewer people will be required," he said.

The strategy recognises that telecommunications companies in "mature markets everywhere are seeing declines in revenues" and aims to "ensure Telecom is the right size for its new position in the market", Bonnar said.

Telecom now has about 7000 employees.

Bonnar would not comment on Telecom's pay structure following the split or if the downsized company was paying its staff less.

Last year the telco drew some flak from the Shareholders' Association, which said the salaries it paid were unacceptably high, given the price of Telecom shares.

Outgoing chief executive Paul Reynolds received total remuneration of $5.2 million during the year to June 30, 2011, the company's annual report shows.

Telecom paid 12 employees $1 million or more during the period - not including Reynolds, who is also a director. This number includes Chorus staff.

Bonnar would not comment if Telecom's new chief executive would receive a smaller pay package than Reynolds. "It's a matter for the board," he said.

Telecom is on the hunt for a new head since Reynolds announced last year he would leave the company after its split with Chorus.

The position becomes available in July.

Although industry sources believed departing Rob Fyfe would be a good replacement, the Air New Zealand boss poured cold water on that speculation last month.

Another potential candidate is Chris Quin, chief executive of Telecom's information and communication technology branch Gen-i.

Some commentators have also speculated that Telecom's former chief operating officer Kevin Kenrick will make a return in the top spot.

Kenrick worked for Telecom for eight years in a variety of divisions including sales, marketing and mobile.

He is also likely to be known to new Telecom chairman Mark Verbiest, who worked for the company as group general counsel when Kenrick was there.

Known as "KK", Kenrick left House of Travel Holdings after a three-year stint as chief executive in 2011 and was national marketing director at Lion Nathan between 1996 and 1999.

According to his LinkedIn page, Kenrick is on "extended holiday and looking for the next big thing".

Telecom reported an adjusted net profit of $240 million for the six months to December 31, up 51 per cent compared with the previous corresponding period.

Telecom shares rose 5.5c on the NZX on Friday to close at $2.38.5c.