Singapore’s second largest telecommunications company StarHub’s decision to axe 300 workers in a restructuring exercise that is expected to rake in $210 million in savings has shocked some employees within the organisation.
StarHub said earlier this week that it will lay off about 10 per cent of its 2,500-strong full-time staff population by the end of this month as part of its “operational efficiency programme”. The telecommunications giant lost 22.8 per cent of its profits in the second quarter of this year, compared to the same quarter in 2017.
The massive retrenchment exercise comes as StarHub plans to strategically move its focus to investments in areas such as new businesses, digital customer service initiatives, enterprise-oriented information and communications technology solutions, and wireless and fibre services.
After axeing 300 full-time staff, the telecommunications giant is set to hire more staff in the cyber security, home and enterprise solutions and customer care fields.
Explaining that StarHub must transform its operating model to avoid “greater risks in the future”, chief executive Peter Kaliaropoulos cited “intense competitive ferocity right across the market, new entrants, lower voice revenues, thinning margins for fixed broadband services, high content costs for pay-television operations and high market penetration for mobile and fixed services” as the reasons the company must transform itself.
He added: “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.”
These reasons, however, do not go very far to assuage the apprehensions of the 300 full-time workers, some of whom feel blindsided over the job cut exercise. Speaking to Today Online on the condition of anonymity, several StarHub employees revealed that they did not anticipate the company’s decision to slash so many jobs.
While many were resigned to the retrenchments, saying that this is “not within (their) control,” one worker told reporters that instead of resorting to retrenching workers, senior leadership staff could have accepted a pay cut to avoid downsizing.
Revealing that he “didn’t expect so many” to be retrenched, the employee asserted: “StarHub still is a profitable company. We still believe that StarHub can do better than downsizing.”
The employee further revealed that the management has briefed staff on compensation packages in the event of retrenchments and said that affected workers will receive one months’ salary for each year they have worked at the company.
Further, the employee said that affected employees could be redeployed to the subsidiaries of StarHub’s parent company, Asia Mobile Holdings – itself a subsidiary of Singapore Technologies Telemedia (ST Telemedia).
Some others, however, appeared to have made peace with their employer’s decision. One female employee said that she understands StarHub’s reasons for the decision even though she has “mixed feelings” since this has an “impact (on) people’s lives”.
Another employee said that he saw this coming, given the developments in the telecommunications industry: “Whatever we are facing is exactly what other telcos are similarly facing. Looking at the trend, some people would have expected some moves will be taken by company to streamline.”