Telus applies damage control after taking axe to payroll

Despite a massive payroll purge at Telus Corp., the company says its big business clients won’t notice a difference in attention to service.

“The whole thing is structured around productivity and customer contact centres,” said Doug Strachan, Telus spokesman in Vancouver. “We’re not going to impact any customers, let alone our enterprise customers.”

Telus, the Western Canadian-based incumbent telco, on July 11 announced that it would chop 6,000 employees from its roster.

The firm said the move is in accordance with a company-wide mandate to streamline operations.

“The cost savings and efficiency gains we achieve through this program will improve future operating profitability and contribute to our goal of becoming free cash flow positive in 2003,” said Telus CEO Darren Entwhistle in a July 11 statement.

But since the cuts include 1,000 management positions, Telus’s big business clients might get a case of the jitters, said Brownlee Thomas, a Montreal-based telecom industry analyst with Giga Information Group Inc.

As an enterprise client, “I’m wouldn’t worry yet,” she said. “But I am going to want a call from my account manager.” Thomas added that in times like these, service providers tend to focus on their bread and butter – their largest customers.

In a July 11 statement Telus said the 6,000 jobs would be cut in 2002 and 2003. They are part and parcel of the company’s “operational efficiency program” enacted in 2001. Now, under “operating and productivity improvements,” Telus will reduce its product portfolio and some of the support systems for those products. Strachan said the company would scuttle “products that aren’t used.”

Telus also plans to consolidate its customer contact centres in Alberta and B.C. Whereas the company used to keep 66 contact centres in 20 communities, Telus plans to keep 28 offices in nine locations.

Telus will also close a number of its Telus Stores – 33 of the 40 will shut their doors permanently by the end of 2002.

Thomas said that although Telus’s latest news might give the company’s enterprise clients cause for pause, the job cuts do make sense.

Consider how many staff members Telus has. “When I see that they had 27,000 employees, that’s an awful lot of fat to trim,” she said.

As well, industry observers and investors had criticized Entwhistle for avoiding tough decisions like this one, Thomas said. If there were any questions left about his mettle, this move could put them to rest.

“It’s just to show that they’re serious about what they’re going to do,” Thomas said. “It probably should have been done quite a long time ago.”