StarHub to retrench 300 full-time employees, restructure company

SINGAPORE — Singapore’s second largest telecommunications firm StarHub announced on Wednesday (Oct 3) that it is laying off about 300 full-time employees as part of a S$25 million restructuring exercise, given the “intense” competition in the market.

These employees are primarily holding “non-customer-facing” positions, and the company will begin informing them no later than the end of this month.

Its chief executive officer Peter Kaliaropoulos said in a statement: “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.”

StarHub said that it had begun an operational efficiency programme to improve productivity and lower operating expenditure, which also “unfortunately” resulted in the retrenchments that will affect 300 of the telco’s 2,500 employees.

The one-off restructuring exercise — including funding to support training, coaching and outplacement — will not impact the indicators of its future earnings for the financial year 2018, it added.

The company’s chief strategic partnership officer Jeannie Ong, who has held senior positions in StarHub since 2001, also announced her departure on Wednesday. No reasons were given for her resignation. Her last day is slated for Dec 31, and she is on garden leave till then.

In its statement, StarHub said that its overall strategic transformation programme is expected to save the company S$210 million over three years from 2019.

Besides the restructuring exercise, the telco is “targeting savings in procurement activities, leasing costs, rationalising spending in network and systems repairs and maintenance, and overall sales and distribution expenses”.

Mr Kaliaropoulos said: “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.”

The telco will work closely with its affiliated companies, the Singapore Industrial and Services Employees’ Union (Siseu), the National Trades Union Congress’ Employment and Employability Institute, and government agencies such as Workforce Singapore to find suitable roles for the 300 affected employees.

Ms Sylvia Choo, executive secretary of Siseu, said that the union will work closely with StarHub’s management to ensure fair treatment and compensation packages for them.

She added that the union will offer support such as in job searching, career coaching and employability training.

Mr Kaliaropoulos acknowledged the contributions that the affected employees have made, saying that for them, it was “not an individual performance issue but one of strategic realignment of StarHub”.

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

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