Job losses at Optus 'will result in poorer service': union

03/05/2012 - Plans to slash 750 jobs at Optus will result in poorer customer service and could lead to jobs being sent offshore, the communications union has warned. Toby Mann

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However, Optus says the forced redundancies will make the telco more efficient and are necessary to ensure the company remains competitive.

The majority of redundancies announced on Wednesday will come from senior and middle management as well as operations, back office and support functions.

They will take place over the coming months and cost the company about $37 million, Optus said in a statement.

The Communications, Electrical and Plumbing Union (CEPU) has warned that Optus may be looking to follow Telstra's lead and move jobs offshore.

"We think it is important that if that is the case, Optus comes clean," CEPU spokesman Jim Metcher told reporters.

Metcher said the redundancies would decrease the telco's ability to properly service the needs of its existing customers and make it difficult for them to grow their business.

"This would have a serious adverse affect on services currently offered by Optus to its customer base and more importantly in terms of where it wants to be as a carrier in the telecommunications industry," he said.

"When we're talking about job cuts in the order of one in 12, that is significant.

"Something would have to give in terms of its services."

Metcher said it was disappointing that there had been no discussion between Optus and the Communications Union.

"We just think it's a very poor decision of Optus making this public announcement without engaging in any communication with the union or its employees," he said.

"There is a huge number of employees, no doubt, that are seeing the same headlines and wondering if they are one of the 12."

Optus executive Kevin Russell said the action was needed to keep the company competitive and would enable it to refocus on customers by creating new customer, marketing and sales divisions.

"The competitive environment requires Optus to have a sustainable cost structure to remain competitive and continue to deliver value to our customers," he said in a statement.

"By creating a more efficient organisation with a renewed focus on the customer, we will be able to compete more effectively."

Two-thirds of the jobs cuts would occur in Sydney with the rest in Queensland, the ACT, South Australia and Victoria, a company spokeswoman said.

Industry research group Ovum has backed the telco's need to cut costs and refocus on its customers, saying job losses were a necessary evil.

"As the industry becomes more competitive and revenue growth slows, cost control is essential," said Ovum's David Kennedy.

"The alternative is for competitiveness, revenue and market share to erode."

Source: AAP

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