2degrees joins fellow telcos, cuts staff

Companies admit AI part of reason behind cuts to staffing

2degrees is the latest telco to trim numbers, following Chorus, Spark, One NZ and much of corporate New Zealand as a whole. An insider told the Herald two positions in the telco’s technology team had gone, with a further 17 under consultation.

“Earlier this year, 2degrees established and appointed two new executive roles designed as we position ourselves for further growth,” a 2degrees spokesman said.

“The change created a blended digital and network team — allowing for more collaboration between vital functions, more efficient delivery of projects and further aligns with 2degrees’ vision of being a software-defined business.

“We have proposed a number of role changes to align with this new structure. As we are currently consulting with staff, it isn’t appropriate to talk to the details until they are confirmed, but we can say we are proposing that fewer than 20 positions are reduced across the technology team of 450 people.”

No other teams were going through the same process.

Meanwhile, One NZ chief executive Jason Paris on Thursday morning said about 200 of 3500 staff were leaving the business after a recent round of consultation.

Paris said the tough economy was a factor. “But the other part of it is that over the last five years we’ve dramatically simplified the business. We’re a much higher-performing business than we were — and that means we need fewer people behind the scenes with the masking tape to keep things together.”

The CEO added: “And it’s certainly the worst part of my job, or anyone’s, to tell someone they’ve lost their job, because it’s a tough market out there. And it’s not just impacting them, it’s impacting their wider wha¯nau. But we’re proud of how we help people through that situation.”

Affected staff were given up to three months’ notice and help finding new roles.

Dozens of staff have been cut at Chorus as the company transitions from being the Ultrafast Broadband (UFB) network builder to operator.

And Spark New Zealand staff were called into restructure meetings earlier this month. The telco says it is on track to achieve its target of $40 million to $60m savings this year, in part through the use of artificial intelligence (AI) and automation. An insider said 22 non-product roles would go from marketing, with cuts expected in other areas.

The telco would not comment on numbers. “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.

Spark shares were recently trading at $4.78. The stock is down 5.06 per cent over the past 12 months.

One NZ is owned by NZX-listed Infratil, whose shares were recently trading at $10.80 or 20.6 per cent up on the past 12 months.

2degrees is privately-held, owned by Voyage, a joint venture between a Macquarie Group infrastructure fund and Australia’s largest superannuation fund, Aware Super.

At its March 5 investor day, Infratil said One NZ was on track to meet fullyear ebitda guidance of $580m to $620m, or an estimated 14 per cent earnings growth.

The presentation said: “A smaller, more highly skilled workforce is emerging.” Reduced hierarchy, simplification and centralisation of functions had enabled a “significant and ongoing rationalisation of our back office”. There were reduced call volumes and higher first-time resolution for customers. AI was now being scaled “to drive significant further productivity improvement”.

Paris said all businesses needed to start getting to grips with AI, if they weren’t already, and individual staff needed to take heed, too.

“AI is not going to take your role, but someone who knows AI better than you will. So you need to understand this technology.”