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StarHub to let 300 full-time employees go, CEO cites 'industry pressures'
STARHUB will start laying off 300 full-time employees by the end of the month, with chief strategic partnership officer Jeannie Ong a notable executive affected by the cuts, The Business Times understands.
Other roles will also be axed in the "operational efficiency programme" announced on Wednesday evening, StarHub said in a statement, citing "ongoing natural attrition" and a tightening of contractor positions. It said that the cuts "will primarily affect non-customer-facing functions".
As part of a strategic transformation plan, the telco will also focus on and invest in areas such as new businesses, digital customer service initiatives, enterprise-oriented information and communications technology solutions, and wireless and fibre services, the company added.
This includes hiring more employees in fields such as cyber security, home and enterprise solutions, and customer care.
StarHub chief executive Peter Kaliaropoulos cited a laundry list of challenges for the company - "the intense competitive ferocity right across the market, new entrants, lower voice revenues, thinning margins for fixed broadband services, high content costs for pay-television operations and high market penetration for mobile and fixed services".
He said that StarHub must transform its operating model as "otherwise we will face greater risks in the future". "Our revised operating structure will be best placed to meet our strategic intent, enhance customer experience, increase accountability and effectiveness and improve competitiveness and agility," he added.
BT first reported that retrenchments were imminent on Sept 29.
StarHub said that the cuts to headcount - more than a 10th of its 2,500 full-time staff members - will come with a one-off restructuring cost of some S$25 million.
But it added that this will not have any impact on the company's earnings guidance for FY2018.
It had previously said in its fourth-quarter financial statements that the staff costs of S$84.7 million for the period included "provisions for certain staff benefits in order to rationalise and retain talent in recognition of the business challenges and operating conditions".
The overall transformation drive is expected to realise S$210 million in savings from 2019 to 2021, StarHub said. Other areas where it could trim the fat include procurement activities, leasing costs, network and systems repair and maintenance, and sales and distribution.
Ms Ong, who worked at StarHub for more than 17 years, is now on gardening leave and will end her service on Dec 31, 2018, the company confirmed in a separate statement to BT.
Her job was made redundant after responsibilities were combined with other functions to create a new senior role of chief corporate officer, said Mr Kaliaropoulos. Veronica Lai, formerly the group general counsel and company secretary, was appointed chief corporate officer on Oct 1.
"The redundancy is not an individual performance issue but one of strategic realignment of StarHub," added Mr Kaliaropoulos, who took on his role on July 9.
"We have been extremely fortunate to have many competent people in our team including Jeannie, but some positions are not sustainable given the current industry pressures."
The telco said that it will work with affiliated companies, as well as the Singapore Industrial and Services Employees’ Union (SISEU), the National Trades Union Congress' Employment and Employability Institute, and government agencies, to help affected staff find suitable new jobs.
It will also offer counselling services such as coaching and skills upgrading.
Sylvia Choo, executive secretary of the SISEU, said in a separate statement that the union was consulted for the exercise and "will work closely with management to ensure fair treatment and compensation package for the affected employees".
StarHub - Singapore's second-largest listed telco after Singtel - was moved from the MSCI Singapore Index to the MSCI Singapore Small Cap Index on June 1 and was dropped from the Straits Times Index on Sept 24.
The counter closed up by S$0.03, or 1.63 per cent, to S$1.87, before the latest announcement.