Optus has publicly denied press reports that it intends to cut over 1000 jobs from its business, but it’s clear that job losses are in the wind.
According to a story in The Australian on 1 March, internal documents leaked from the company show that Optus is planning to reduce staff numbers in customer service, networks and corporate support areas. It is suggested in the article that the cuts are designed to offset costs the company has incurred acquiring the rights to sports content ie the English Premier League.
When contacted by the CWU, Optus said that the The Australian report was inaccurate but did not deny that an internal reorganisation was being planned.
It would appear that one target is its retail distribution network (including that of Virgin mobile), with some of its worst performing stores being targeted for closure.
The CWU has told Optus that whether that reorganisation means job losses of 1000 or 10, employees and their union representatives shouldn’t be hearing about it from the media before any formal consultation has taken place.
We have also expressed the view that any cuts, especially to customer facing staff numbers, will be self-defeating for the business.
Optus’ move into high end sports content is part of the company’s repositioning of itself in the market as a multi-service company able to exploit the opportunities offered by modern platforms, both fixed and mobile. And while the jury is still out on whether the revenues generated by the EPL play will compensate for the costs of the rights ($189m over three years) some of the signs are positive.
Recent research done by Roy Morgan has found that out of the 1.67 million Australian EPL viewers, 77% have fixed broadband in their homes and some 20% of them are very or fairly likely to switch internet provider in the next 12 months. Of mobile EPL viewers, 18% were likely to switch.
There is little doubt that the EPL deal offers Optus an opportunity to enlarge its customer base.
But high quality customer service will be a key to success in this and other similar ventures. Optus needs to think twice before it cuts back on the resources needed to build and sustain growth in these areas.