Spark job losses brought forward
Spark has brought forward job losses but warned investors it would have to fork out more this year to pay for the restructuring.
Spokeswoman Lucy Fullarton declined to say how many staff members were leaving Spark, but financial forecasts from the company appear to suggest several hundred would be leaving Spark or had already left during the 18-month period ended in December.
The company said in a statement that it expected an additional $30 million in
‘‘labour cost benefit’’ during the second half of the calendar year, as a result of the acceleration announced yesterday of its ‘‘performance improvement programme’’ called Quantum.
Those cost cuts will come on top of
$60m in labour savings expected in the year to the end of June.
Together, the restructuring will reduce Spark’s annual labour-cost bill over the 18-month period by almost 20 per cent, to $470m.
During the year to July 2015, Spark axed 500 jobs, with managing director Simon Moutter rewarded for the restructuring through his bonus.
Spark said it would incur an additional $25m to $30m in costs in the year to July to cover the restructuring and related costs, on top of the $25m previously signalled. The company is now forecasting an operating profit for the year of $917m to $991m, down from its previous forecast of $996m to $1016m.
Moutter said the Quantum programme was designed to position Spark as the ‘‘lowest-cost operator’’ in the telecommunications market by simplifying its products and processes.
It involves staff members adopting a working process popularised by the software industry called Agile, which tends to involve people working in more informal groups to implement changes incrementally, rather than work being organised into larger, more hierarchical projects.
Moutter first indicated Spark might accelerate the Quantum project at its interim results briefing in February, but at the time he was not able to confirm that.