SINGAPORE: StarHub will axe 300 of its full-time employees, the local telco announced on Wednesday (Oct 3) as it restructures amid fierce competition in the industry.
As part of its Strategic Efficiency Transformation Initiatives, StarHub said it has initiated “an operational efficiency programme” to improve productivity, which concluded that a reduction of workforce is required.
Approximately 300 out of its 2,500 full-time employees will be impacted, StarHub said, with the workforce reductions primarily affecting non-customer facing positions throughout the company.
“On-going natural attrition and tighter management of contractor roles will result in additional roles being made redundant,” StarHub said in a statement on Wednesday, adding that it would start notifying the affected employees no later than the end of October.
StarHub’s earnings have been on a downward trend for the past 10 quarters amid intensifying competition on the mobile and pay TV fronts.
Australia's TPG Telecom is currently building its mobile network infrastructure after successfully bidding to become Singapore's fourth telco operator in December 2016.
At the same time, streaming companies such as Netflix – which launched in Singapore in 2016 - provide content alternatives for consumers.
StarHub last posted a profit gain in the second quarter of 2016, when net earnings rose 9.6 per cent year-on-year. Despite that, its full-year net profit for 2016 fell 8.3 per cent to S$341.4 million.
In 2017, full-year net profit plunged even more, by 27.1 per cent to S$249 million. Its share price has also taken a hit, plunging 34 per cent so far this year.
“The intense competitive ferocity right across the market, new entrants, lower voice revenues, thinning margins for fixed broadband services, high content costs for Pay TV operations and high market penetration for mobile and fixed services, has necessitated efficiency optimisation initiatives as part of the strategic transformation plan,” said StarHub CEO Peter Kaliaropoulos.
“Technological innovation and competition are redefining how we deliver services to our customers and we at StarHub need to transform our operating model, otherwise we will face greater risks in the future.”
StarHub's restructuring is expected to see S$210 million in savings over a three-year period from 2019.
The decision to lay-off the 300 positions was not taken lightly, StarHub's CEO said. “We wish to recognise the extensive contribution that our impacted employees have made to the company’s past development and growth. Such decisions are never taken lightly.”
“I am very aware of the impact on all our employees, and we are making every effort to support those impacted through this challenging transition. The redundancies are not an individual performance issue but one of strategic realignment of StarHub.
"We have been extremely fortunate to have many competent people in our team but some positions are not sustainable given the current industry pressures,” he added.
StarHub said it will continue to invest in its new businesses, such as its cybersecurity joint venture Ensign InfoSecurity, while striving to deliver a better service experience for its existing customers.
In a statement, the Singapore Industrial and Services Employees’ Union (SISEU) said it will work closely with StarHub to ensure that the affected workers get fair treatment and compensation.
“Our immediate priority is to ensure that affected employees will have a smooth transition to their next job,” said SISEU executive secretary Sylvia Choo.
“Together with NTUC’s e2i (Employment and Employability Institute), we will also work with our partners - Infocomm Media Development Authority and Workforce Singapore - to offer employment assistance such as in job searching, career coaching and employability training.”