Telus cuts jobs despite huge profits

Telus said it will increase its quarterly dividend by 10 per cent to 44 cents per share, payable January 4.

Telus says that the 1500 job cuts will create costs saving of between $100-million and $125-million annually, but means that restructuring costs will rise to about $250-million this year, instead of the $125-million the company had originally anticipated.

Overall, the company is expected to save as much as $125 million each year, though part of which will be distributed to increase dividends among its shareholders.

“Our company continued to deliver solid financial and operational results in both our wireline and wireless businesses”, Darren Entwistle, Telus resident and CEO, said in a statement.

The company, which has 47,000 employees in total, with 20,000 of those in Telus’s global division, is expecting 40 per cent of the job cuts will come from its unionized workforce with buyouts and early retirement incentives, described by chief corporate officer Josh Blair as “industry-leading, very generous buyouts”. The company is also facing a more volatile market now that Alberta’s reduced oil price has hit the country negatively. The remainder will be completed during the first quarter, the company said.

The two decisions shouldn’t be linked with each other, Entwistle said.

Both net income and adjusted net income were up about 2.8 per cent, rising to $365 million and $398 million respectively. “Our track record is strong for leveraging the investments we make in our customers, new technology, and efficiency enhancements, and we anticipate the additional cost efficiency initiatives to provide annual recurring savings of between $100 million to $125 million, including a few savings commencing in the fourth quarter of 2015”.

“When you reduce your staff by 2,000 people, those are 2,000 lines you no longer need”, Horan said.

Blair said Telus’ introduction in the quarter of a data notification service warning customers when they are reaching the end of their data allowance also contributed to a reduction in data revenue.

Entwistle noted that the The $4.5-billion the company plans to spend on capital expenditures and spectrum in 2015 are the biggest bets the company has made to date.