StarHub to slash 300 jobs in 'strategic transformation'

Citing pressures from "intense local competition", the Singapore telco says it has embarked on an "operational efficiency" plan to improve productivity and lower operating expenditure across the organisation.

StarHub has unveiled plans to slash 300 jobs as part of an organisation-wide "strategic transformation" initiative, which the Singapore telco says is necessary amidst increasing market competition.

The redundancies would impact primarily non-customer facing functions, it said in a statement Wednesday, adding that affected employees would be notified by the end of the month.

StarHub said the move was part of an "operational efficiency programme" aimed at improving productivity and speed in decision-making as well as lowering operating expenditure.

The telco's "transformation" efforts was expected to yield S$210 million in savings over three years from 2019. Apart from the job cuts, it also was looking to gain further savings from procurement activities, leasing costs, optimising spending in network and systems repairs and maintenance, and overall sales and distribution expenses.

The restructuring would result in a one-off cost estimated to be S$25 million, which would include funding for outplacement, training, and coaching.

StarHub CEO Peter Kaliaropoulos said: "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, have necessitated efficiency optimisation initiatives as part of the strategic transformation plan.

"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," Kaliaropoulos said.

He further noted that the transformation efforts aimed to simplify the company structure and product offerings as well as bring about more agility to improve customer experience.

He added that StarHub would continue expanding its workforce in areas earmarked for growth, such as cybersecurity, customer care as well as home and enterprise offerings.

The telco said it would focus its investment in new businesses such as Ensign InfoSecurity, wireless and fibre services, as well as its digitalisation initiatives to transform customer experience.

StarHub last month established cybersecurity company Ensign InfoSecurity through a joint venture with state-own investment firm Temasek Holdings. The telco owns 40 percent of the joint venture, while Temasek holds the remaining 60 percent.

Kaliaropoulos was appointed StarHub CEO in July this year, taking over from former chief Tan Tong Hai who announced his resignation last November.

The pay TV operator earlier this year dropped several channels from Discovery Networks after negotiations to renew the distribution fell through. These had included channels popular amongst local viewers, including Discovery Channel and Animal Planet.

In defending its decision, StarHub said content should be acquired at "a sensible price" that would not require its customers to shoulder increase in costs. In its half-year report, the company said it lost 39,000 pay TV customers during the year, but ARPU (average revenue per user) climbed from S$51 to S$52 per month due to FIFA World Cup subscriptions. It had a total of 438,000 pay TV customers as of June 30, with the business bringing in S$165.4 million in revenue, down 13.2 percent.

Rival pay TV operator Singtel last week said it had secured the rights to offer Discovery's full suite of content in Singapore, including HGTV, Asian Food Channel, and Food Network.