Telus Corp. announced Friday it is cutting 6,000 jobs as it seeks to adapt to a “rapidly transforming industry,” saying issues such as regulation and competition have prompted the need to reduce its payroll.
The Vancouver-based telecommunications company said the reduction includes 4,000 workers at its main Telus business, half of which are being laid off. The other portion is made up of those who would be offered early retirement and voluntary departure packages, along with vacancies that will not be refilled.
The remaining 2,000 cuts are at Telus International, which provides IT services and customer service to global clients.
“It was a very difficult decision,” said Telus chief financial officer Doug French in an interview.
“The industry keeps changing and from a competitive perspective, we always want to prepare ourselves for the future. We see more digitization, we see prices are coming down in our industry, which customers are looking for. And so preparing to ensure we continue to be very competitive in the market, we need to align our cost structure to what that looks like.”
Earlier this year, federal Industry Minister Francois-Philippe Champagne detailed a new mandate for the CRTC, requiring the federal telecommunications regulator to implement new rules to bolster consumer rights, affordability, competition and universal access.
The directive rescinded a 2006 policy direction for the agency to rely on market forces in making decisions.
But French said the federal government should let the market compete among the four national carriers.
“We obviously would prefer to just have straight competition and regulation. I believe the competitive environment in Canada is very, very strong.”
French said the cuts also reflect a shift toward increased digitization in the sector, as customers “want more self-serve” options, while the finalization of recent mergers and acquisitions by the company also played a role.
Telus had 108,500 workers at the end of last year, according to financial markets data firm Refinitiv. French said cuts would affect employees across “all areas of our business” and be complete by the end of the year, with most done by the start of the fourth quarter.
The restructuring will cost the company $475 million in 2023 and lead to annual savings of more than $325 million, Telus said.
The cuts will help prepare the company for future challenges, said chief executive Darren Entwistle on a conference call Friday.
“When you look at the efficiencies that we’re driving, they are pre-emptive in terms of how we see certain regulatory challenges evolving in the months and the years ahead and we want to get ahead of it,” Entwistle told analysts.
“Our ability to take costs out of the business today will prepare us to better absorb any regulatory impediments … and we’re an organization that just wants to control our own destiny along the way.”
Other telecommunications businesses have also sought to streamline their operations this year as they grapple with regulatory action amid soaring interest rates and stubbornly high inflation.
Fellow telecommunications giant BCE Inc. said in mid-June that it would slash 1,300 positions, including six per cent of its media arm. It blamed the job cuts on a challenging public policy and regulatory environment, raising specific concerns about Bill C-11, the Online Streaming Act, and Bill C-18, the Online News Act.
Meanwhile, Rogers Communications Inc. told staff in a memo last month that it would offer voluntary departure packages as it worked to eliminate duplication in its businesses following the closure of its deal to buy Shaw Communications Inc., saying later that “a small percentage” left involuntarily since the combination with Shaw.
Telus’ plans to reduce its workforce were announced at the same time as the company revealed its second-quarter net income fell almost 61 per cent from the same period last year to $196 million.
Last month, Telus revised doward its annual guidance for 2023, citing demand pressures affecting Telus International in particular as the technology sector looks to reduce costs. The company said it was targeting consolidated operating revenue growth of 9.5 to 11.5 per cent, down from 11 to 14 per cent.
But Telus continues to have a high level of confidence in the growth prospects of Telus International, which it spun off in 2021 but remains the controlling shareholder, said Entwistle.
He said Telus has no plans to buy back Telus International but that it was a critical enabler of the Telus’ growth strategy and its future prospects were encouraging.
“As it deals with the macroeconomic challenges in front of it, with the right moves, the medium and longer term prospects for the organization are exceedingly strong,” Entwistle said.
The cuts announced on Friday help balance the labour supply at Telus International with the level of revenue it’s seeing, said French.
He did not rule out further job reductions at Telus beyond those announced Friday.
“When we make a decision like this, it is not easy and we’d prefer not to continue to do more in the future,”said French.
“That being said, depending on market conditions … that would be more determined on what that looks like, including regulation.”
This report by The Canadian Press was first published Aug. 4, 2023.
Companies in this story: (TSX:T, TSX:RCI.B, TSX:BCE)
TOKYO (AP) — Japanese technology group SoftBank swung back to profitability in the July-September quarter, boosted by positive results in its Vision Fund investments.
Tokyo-based SoftBank Group Corp. reported Tuesday a fiscal second quarter profit of nearly 1.18 trillion yen ($7.7 billion), compared with a 931 billion yen loss in the year-earlier period.
Quarterly sales edged up about 6% to nearly 1.77 trillion yen ($11.5 billion).
SoftBank credited income from royalties and licensing related to its holdings in Arm, a computer chip-designing company, whose business spans smartphones, data centers, networking equipment, automotive, consumer electronic devices, and AI applications.
The results were also helped by the absence of losses related to SoftBank’s investment in office-space sharing venture WeWork, which hit the previous fiscal year.
WeWork, which filed for Chapter 11 bankruptcy protection in 2023, emerged from Chapter 11 in June.
SoftBank has benefitted in recent months from rising share prices in some investment, such as U.S.-based e-commerce company Coupang, Chinese mobility provider DiDi Global and Bytedance, the Chinese developer of TikTok.
SoftBank’s financial results tend to swing wildly, partly because of its sprawling investment portfolio that includes search engine Yahoo, Chinese retailer Alibaba, and artificial intelligence company Nvidia.
SoftBank makes investments in a variety of companies that it groups together in a series of Vision Funds.
The company’s founder, Masayoshi Son, is a pioneer in technology investment in Japan. SoftBank Group does not give earnings forecasts.
Shopify Inc. executives brushed off concerns that incoming U.S. President Donald Trump will be a major detriment to many of the company’s merchants.
“There’s nothing in what we’ve heard from Trump, nor would there have been anything from (Democratic candidate) Kamala (Harris), which we think impacts the overall state of new business formation and entrepreneurship,” Shopify’s chief financial officer Jeff Hoffmeister told analysts on a call Tuesday.
“We still feel really good about all the merchants out there, all the entrepreneurs that want to start new businesses and that’s obviously not going to change with the administration.”
Hoffmeister’s comments come a week after Trump, a Republican businessman, trounced Harris in an election that will soon return him to the Oval Office.
On the campaign trail, he threatened to impose tariffs of 60 per cent on imports from China and roughly 10 per cent to 20 per cent on goods from all other countries.
If the president-elect makes good on the promise, many worry the cost of operating will soar for companies, including customers of Shopify, which sells e-commerce software to small businesses but also brands as big as Kylie Cosmetics and Victoria’s Secret.
These merchants may feel they have no choice but to pass on the increases to customers, perhaps sparking more inflation.
If Trump’s tariffs do come to fruition, Shopify’s president Harley Finkelstein pointed out China is “not a huge area” for Shopify.
However, “we can’t anticipate what every presidential administration is going to do,” he cautioned.
He likened the uncertainty facing the business community to the COVID-19 pandemic where Shopify had to help companies migrate online.
“Our job is no matter what comes the way of our merchants, we provide them with tools and service and support for them to navigate it really well,” he said.
Finkelstein was questioned about the forthcoming U.S. leadership change on a call meant to delve into Shopify’s latest earnings, which sent shares soaring 27 per cent to $158.63 shortly after Tuesday’s market open.
The Ottawa-based company, which keeps its books in U.S. dollars, reported US$828 million in net income for its third quarter, up from US$718 million in the same quarter last year, as its revenue rose 26 per cent.
Revenue for the period ended Sept. 30 totalled US$2.16 billion, up from US$1.71 billion a year earlier.
Subscription solutions revenue reached US$610 million, up from US$486 million in the same quarter last year.
Merchant solutions revenue amounted to US$1.55 billion, up from US$1.23 billion.
Shopify’s net income excluding the impact of equity investments totalled US$344 million for the quarter, up from US$173 million in the same quarter last year.
Daniel Chan, a TD Cowen analyst, said the results show Shopify has a leadership position in the e-commerce world and “a continued ability to gain market share.”
In its outlook for its fourth quarter of 2024, the company said it expects revenue to grow at a mid-to-high-twenties percentage rate on a year-over-year basis.
“Q4 guidance suggests Shopify will finish the year strong, with better-than-expected revenue growth and operating margin,” Chan pointed out in a note to investors.
This report by The Canadian Press was first published Nov. 12, 2024.
TORONTO – RioCan Real Estate Investment Trust says it has cut almost 10 per cent of its staff as it deals with a slowdown in the condo market and overall pushes for greater efficiency.
The company says the cuts, which amount to around 60 employees based on its last annual filing, will mean about $9 million in restructuring charges and should translate to about $8 million in annualized cash savings.
The job cuts come as RioCan and others scale back condo development plans as the market softens, but chief executive Jonathan Gitlin says the reductions were from a companywide efficiency effort.
RioCan says it doesn’t plan to start any new construction of mixed-use properties this year and well into 2025 as it adjusts to the shifting market demand.
The company reported a net income of $96.9 million in the third quarter, up from a loss of $73.5 million last year, as it saw a $159 million boost from a favourable change in the fair value of investment properties.
RioCan reported what it says is a record-breaking 97.8 per cent occupancy rate in the quarter including retail committed occupancy of 98.6 per cent.
This report by The Canadian Press was first published Nov. 12, 2024.
