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StarHub plans strategic realignment; 300 jobs to be axed

StarHub plans strategic realignment; 300 jobs to be axed

Transformation expected to realise an estimated $210 million in savings

Credit: Dreamstime

StarHub will undergo a strategic transformation to improve operational efficiencies and productivity over a three-year period from 2019; cutting 300 jobs in the process.

The transformation is expected to realise an estimated $210 million in savings over the three-year period from 2019, as the telco giant's new CEO grapples with increased competition and unfavourable market trends for its legacy business.

There will also be a strategic realignment towards new business such as the recently created cyber security company - Ensign InfoSecurity - and further digitalisation initiatives around customer experience and new wireless and fibre services.

The telco will also look to accelerate investments in developing information and communications technology solutions and capabilities for enterprise customers.

“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 Peter Kaliaropoulos, CEO of StarHub.

“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.

"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."

Furthermore, due to intense local competition and adverse industry trends, an operational efficiency programme will be implemented as part of the restructuring, designed to improve productivity, improve speed in decision making and lower operating expenditure across the board; 300 full-time employees will be impacted as a result.

Of those employees who are impacted by this move, StarHub will begin notifying them as soon as practical - subject to compliance with statutory reporting and regulatory requirements - and no later than the end of October 2018.

Furthermore, in addition to a workforce reduction the telco is also targeting savings in procurement activities, leasing costs, rationalising spending in network and systems repairs and maintenance and overall sales and distribution expenses.

This is part of efforts to redirect the company’s resources to fund growth opportunities, with lower net savings realised according to StarHub.

StarHub will need to make a one-off payment of $25 million for the restructuring. This includes funding to support outplacement, training and coaching, however, this will not have any impact on StarHub’s guidance for FY2018 the telco claimed.

“We wish to recognise the extensive contribution that our impacted employees have made to the company’s past development and growth,” said Kaliaropoulos. "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."

Kaliaropoulos said the redundancies are not an individual performance issue but one of a "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," Kaliaropoulos added.

"The strategic transformation review is aimed at simplifying our company structure, simplifying product offerings and customer touch points with the ultimate aim to be more agile, to deliver better customer experience and to drive sustainable growth.

"While reducing overall resources, StarHub will continue to grow its workforce in areas such as cyber security, home and enterprise solutions and customer care."

StarHub plans on working closely with its affiliated companies, the Singapore Industrial and Services Employees’ Union (SISEU), NTUC’s e2i (Employment and Employability Institute) and government agencies such as Workforce Singapore to identify suitable roles for impacted employees.

Support will also be provided in terms of comprehensive career transition and outplacement counselling, including coaching and skills upgrading programmes.


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